Pay panel report is out, 40-60% raise proposed (Six Pay Commission Report Out )

With poll calculations dominating the UPA government’s agenda, the more than four millionstrong central bureaucracy is in for a windfall. The Sixth Pay Commission’s recommendations, given to the finance minister on Monday, could mean a revision in pay and allowances that can range from 40% to 60% if all benefits are taken into account.
The recommendations are likely to be considered soon by the Cabinet. Finance minister P Chidambaram had made necessary elbow room in his Budget speech last month, while the railway budget included a provision for implementation of the report presented by Justice B N Srikrishna.
The report is expected to be welcomed by the babus as well as defence and paramilitary employees. As reported earlier by TOI, the highest pay in the government has been pegged at Rs 90,000 for the cabinet secretary, while a secretary would draw Rs 80,000 a month. The three service chiefs would get the same salary as the cabinet secretary if the recommendations are accepted.
Although the commission claimed a 1:12 lowest-to-highest pay ratio, the biggest beneficiaries would be officers of the level of joint secretary and above, giving the recommendations a pro-IAS tilt. The benefits for other central service officers, especially at director level, are not so attractive.

The government would be pleased to offer benefits to the vast bureaucracy, seen as an important constituency. Just as farmers have a loan waiver and the middle class higher tax exemptions, the Pay Commission report is a sop for government servants. It is likely to be extended by state governments to their employees as well. Haryana chief minister Bhupinder Hooda had already promised to do so.
There is cheer for subordinate staff as the panel has proposed to eventually scrap Group D services and start the government hierarchy from Group C. It has suggested a retraining system for those in Grade D for taking them to the higher scale.
BABUS GET RICHER
PAY OVERHAUL
Minimum entry-level pay Rs 6,660; Cabinet secy, chiefs of army, navy and air force to get fixed pay of Rs 90,000 Number of grades reduced to 20 from 35. Each of four pay bands (two for Group A, one each for Groups B & C) to have grade pay, minimum of Rs 1,800 per month, max of Rs 13,000 Group D scrapped, employees to be retrained, assimilated into Group C
ANNUAL INCREMENT
2.5% for all employees 3.5% for 20% of ‘performing’ Group A officers
PENSION
Pension to be paid at 50% of average emoluments or last pay drawn, delinked from service length Higher rates of pension at the age of 80, 85, 90, 100 Full family pension for 10 years if employee dies within 10 years of retirement
Govt’s Bill Hike to cost Rs 12,561cr in 2008-09 Additional one-time burden of Rs 18,060cr for arrears
ALLOWANCES
Most allowances to be doubled City compensatory allowance to be merged with transport allowance and increased four times HRA raised for A, B1, B2 cities to 20%; C and other cities to 10% Monthly education allowance to be Rs 1,000 per child, up from Rs 50
HEALTH
New medical scheme for employees and pensioners. Insurance scheme to meet pensioners’ OPD needs in non-CGHS areas
DEFENCE
Defence forces on a par with civilians in pay and grades. Special military pay of Rs 6,000 up to the rank of brigadier
REGULATORS
Salary of chiefs of regulatory bodies, including Sebi, Trai and IRDA, up to Rs 3 lakh per month
WORK HOURS
Five-day week to continue Only 3 national holidays — Jan 26, Aug 15 & Oct 2. No gazetted holidays; restricted holidays up from 2 to 8 Concessions for women: staggered working hours, child care leave, enhanced maternity leave of 180 days
PERFORMANCE SOPS
Market-driven pay for young scientists & specialists Contract for high-skill posts Performance-linked incentive plan to replace existing annual bonus, honorarium, overtime Person stagnating at pay band peak for over a year to get next higher band Number of grades may come down from 35 to 20

New Delhi: Under the Sixth Pay Commission, the total number of grades has been reduced from 35 to 20 — spread across four distinct pay bands. Every post (except the top two fixed scales) would also have a distinct grade pay, besides the usual scale, and the combination of both would be taken into account for calculating increments and inflation-driven hikes (like DA and most other allowances).
The minimum Grade C pay would now be Rs 6,660 as against the earlier salary of Rs 5,623 (Grade D). The maximum would be Rs 23,000 (earlier Rs 15,445). The minimum for groups B and A would be Rs 12,900 (earlier Rs 11,025) and Rs 21,000 (earlier Rs 17,640). The proposed maximum would be Rs 40,200 (earlier Rs 29,768) and Rs 80,000 (earlier Rs 57,330). A fixed rate of 2.5% annual increment has been proposed for all. However, for Group A officers of third pay band (PB3), a new variable system has been introduced — 20% of those who “perform” would get an increment at 3.5%.
To counter the impact of inflation, a new system has been suggested with base year of consumer price index (CPI) for computation of DA to be “revised as frequently as feasible”. The panel has also suggested that the National Statistical Commission come up with a “separate CPI” for government employees.
The contribution of defence officers has been given special weightage. They would get an additional Rs 6,000 every month as “military service pay”. The other scales would be on par with the ones for civilian employees. MSP would be Rs 4,200 for military nursing service officers and Rs 1,000 for other ranks.
The commission has also proposed an enhanced, inflation-linked allowance regime, revising some of the ridiculously low benefits granted earlier. HRA in the six metros remains unchanged at 30%. For smaller cities and towns, it would be 20% and 10% as per classification.
A city compensatory allowance (earlier maximum Rs 300) and transport allowance (earlier maximum Rs 800) have been merged and hiked four times. Expenses for tours undertaken by employees and officers would now be reimbursed as per actual expenses against the earliest maximum of Rs 650 per day.
Reimbursement of school fees (for two children) has been substantially hiked from the earlier Rs 50 per month to Rs 1,000. For the wards living in hostels, it would be Rs 3,000 per month (up from Rs 300). The allowances would be auto renewed when DA crosses 50%, while transport allowance would be hiked every year, according to DA rates. A new medical scheme has been suggested for all employees and pensioners and it would be compulsory for new entrants in both categories. Loans and advances to employees from commercial banks would come cheaper as the government would provide a 2% subsidy on the prevailing interest rates.
In a revolutionary proposal, the commission has suggested that the government remain closed on only three national holidays every year (January 26, August 15 and October 2) and all other “gazetted holidays” be abolished. The new system would have eight restricted holidays (up from two) in a year and employees can choose them as per their wish. Maternity leave is proposed to be increased to 180 days, while a special child care leave has also been suggested.
The report suggests fixing pension at 50% of average annual emoluments or last pay drawn (whichever is more) while delinking it with the 33-year service qualifier. A higher rate of pension has been proposed on employee attaining 80, 85, 90, 95 and 100 years of age. Full family pension would be provided for 10 years (up from 7 years) in case the pensioner dies.