TO COMPENSATE the hardships faced by soldiers and match trends of modern armies around the world, the Sixth Pay Commission has reeommended a military service pay (MSP) of Rs 6,000 per month for off cers (up to brigadier) and Rs 1,000 for personnel below officer rank. In its report submitted to the government on Monday, the Justice B.N. Srikrishna-headed panel has also enhanced the grade pay (rank pay) for armed forces personnel to lend some respectability to their take-home package. The rank pay for captains is proposed to be raised to Rs 5,700 from Rs 400 and major generals and lieutenant generals - who till now were not drawing rank pay - will carry home an additional Rs 9,000 and Rs 11,000 per month, respectively. With a proposed monthly pack- age of Rs 90,000 (fixed), the Commission has equated the salaries of the three service chiefs to that of the cabinet secretary. The chiefs were drawing Rs 30,000 (fixed) till now. The new pay structure, to be implemented retrospectively from January 1, 2006, has attempted to finish off monetary stagnation at various ranks by introducing a common pay band of Rs 15,600-39,100 for officers of the rank of lieutenant to brigadier.
In the pre-revised scale, the basic salary of a colonel was capped at Rs 17,350 but a uniform pay band will stave off his salary freeze. Soldiers will not be paid arrears of the MSP, or X-factor pay as it is called in the UK. A lieutenant, sublieutenant or flying officer will get a total revised monthly pay of Rs 25,760 to Rs 28,890 (around 20 per cent dearness al- lowance from January 2006 to be added for all ranks) compared to the existing pay band of Rs 8,250 to Rs 10,050 (DA excluded). Likewise, colonels and equivalent in the existing pay scale of Rs 15,100 to Rs 17,350 will come under a revised scale of Rs 43,360 to Rs 47,270, depending upon seniority. From a pay band of Rs 18,400-24,500, major generals and equivalent ranks in the other two services have been catapulted to a scale of Rs 39,200 to Rs 67,000. Their monthly salaries will now be in the region of Rs 52,280-Rs 57,990 plus a DA component of roughly Rs 8,000. "In real terms, the take-home package will increase by just about 40 per cent," a senior officer said. The Commission has proposed a revised pay of Rs 80,000 (fixed) for vice-chief and army commanders compared to the existing Rs 26,000 (fixed). The sepoy, at the bottom of the army hierarchy, will get a total revised pay of Rs 10,670-12,500, including an MSP of Rs 1,000 and group pay of Rs 1,400. The panel has recommended the doubling of the Siachen allowance for soldiers. As of now, officers serving there get Rs 7,000 per month. It has also recommended doubling of the counter-insurgency and high altitude allowances. A lieutenant colonel serving in the CI grid will get Rs 7,800, compared to the existing Rs 3,900, if the proposals are accepted. rahul.singh@hindustantimes.com IN DANGER ZONE S!ACHEN ALLOWANCE for soldiers may be doubled, as recommended by the panel. As of now officers serving there get Rs 7,000 per month. ALSO DOUBLED could be counter-insurgency and high altitude allowance. A lieutenant colonel serving in the counter-insurgency grid will get Rs 7,800, compared to the existing Rs 3,900, if the proposals are accepted.
Showing posts with label Six Pay Commission Report. Show all posts
Showing posts with label Six Pay Commission Report. Show all posts
Tuesday, March 25, 2008
Indian Express on Sixth Pay Commission
PROPOSING a 40% hike in salaries, the Sixth Pay Commission has taken a leaf out of the private sector book to introduce performance-related incentives but has rejected the argument for parity between public and private sector salaries. It has cited studies and discussions to argue that several factors, including prestige, job-security, pension, allowances and perks, outweigh the salary gap.
The commission received a large number of representations, particularly from Group A officers, highlighting disparities between salaries in the government and those in the private sector and arguing that this led to reduced attractiveness of the Government as a career option and a decline in the quality of intake.
Extensive discussions with heads of training institutions, the panel's report says, found that this contention had no sound basis "as the compensation package has not made any significant impact on quality of intake which has remained consistent over the years."
The commission's key conclusions: ¦ According to a study by the Xavier Labour Relations Institute, commissioned by the Pay Panel, compensation provided by the Government is higher at Group C and D levels, marginally high for Group B employees and only substantially higher for Group A officers in the Government. The study also revealed that "merely comparing salaries without taking into account the total package of allowances and benefits available within the government, especially the value of pension and the value of job security provided, cannot be undermined since they form major components of the total package."
¦ The Government provides "unparalleled variety and job content," along with a much wider canvas of operations than the private sector. "The prestige involved in working for the Government and the opportunity of making a contribution to national policy or its implementation" are other aspects which add an unquantifiable value to Government jobs.
¦ Job-related stress is "significantly lower" in the government and work schedules provide a "more favourable work-life balance."
¦ In the private sector, the Cost To Company (CTC) may not actually be a reflection of the take-home pay, as a major proportion of the CTC consists of variable pay which is based on performance. Further, high-starting salaries as projected in the media and other reports are granted only to a minuscule number who are the best students of top-end management schools and, at times, are not reflective of the industry average.
¦ Grant of extremely high pay packages in certain sectors maybe a result of the demand for talent at the time of initial setting up of an industry or during the boom period. "Such episodic events should not be used as the yardstick for comparison, as ultimately higher salaries in these sectors get normalized over time."
¦ The main consideration in the private sector being "profit," an equal comparison with the Government is not going to be ever possible as any increase in the resources of the Government needs to be primarily directed towards development.
However to bridge the gap vis-à-vis the private sector to some extent, the Commission says it has recommended a higher starting salary for Group A posts and called for giving the Government flexibility to offer a "market-driven salary" to highly qualified scientific and technical personnel whose skills are in demand in the private sector.
This higher package, the report says, will be accompanied with a fixed-term contract which could be altered based on performance. Further, taking into account the fact that a large portion of the salary in the private sector comes from performance-related payments, the Commission has recommended introduction of performance-related incentives in the Government.
The commission received a large number of representations, particularly from Group A officers, highlighting disparities between salaries in the government and those in the private sector and arguing that this led to reduced attractiveness of the Government as a career option and a decline in the quality of intake.
Extensive discussions with heads of training institutions, the panel's report says, found that this contention had no sound basis "as the compensation package has not made any significant impact on quality of intake which has remained consistent over the years."
The commission's key conclusions: ¦ According to a study by the Xavier Labour Relations Institute, commissioned by the Pay Panel, compensation provided by the Government is higher at Group C and D levels, marginally high for Group B employees and only substantially higher for Group A officers in the Government. The study also revealed that "merely comparing salaries without taking into account the total package of allowances and benefits available within the government, especially the value of pension and the value of job security provided, cannot be undermined since they form major components of the total package."
¦ The Government provides "unparalleled variety and job content," along with a much wider canvas of operations than the private sector. "The prestige involved in working for the Government and the opportunity of making a contribution to national policy or its implementation" are other aspects which add an unquantifiable value to Government jobs.
¦ Job-related stress is "significantly lower" in the government and work schedules provide a "more favourable work-life balance."
¦ In the private sector, the Cost To Company (CTC) may not actually be a reflection of the take-home pay, as a major proportion of the CTC consists of variable pay which is based on performance. Further, high-starting salaries as projected in the media and other reports are granted only to a minuscule number who are the best students of top-end management schools and, at times, are not reflective of the industry average.
¦ Grant of extremely high pay packages in certain sectors maybe a result of the demand for talent at the time of initial setting up of an industry or during the boom period. "Such episodic events should not be used as the yardstick for comparison, as ultimately higher salaries in these sectors get normalized over time."
¦ The main consideration in the private sector being "profit," an equal comparison with the Government is not going to be ever possible as any increase in the resources of the Government needs to be primarily directed towards development.
However to bridge the gap vis-à-vis the private sector to some extent, the Commission says it has recommended a higher starting salary for Group A posts and called for giving the Government flexibility to offer a "market-driven salary" to highly qualified scientific and technical personnel whose skills are in demand in the private sector.
This higher package, the report says, will be accompanied with a fixed-term contract which could be altered based on performance. Further, taking into account the fact that a large portion of the salary in the private sector comes from performance-related payments, the Commission has recommended introduction of performance-related incentives in the Government.
Hindustan Times on Sixth Pay Commission
IT IS a windfall for over 45 lakh central government employees. The sixth Pay Commission on Monday submitted its report to the government proposing a substantial increase in salaries and allowances for government employees, while seeking to streamline allowances, pension and medical insurance. The revised pay scales will be effective retrospectively from January 1, 2006, while recommendations relating to allowances will be implemented prospectively. Existing rates of most of the allowances have been doubled for both defence and civilian staff. As per the revised pay scales, minimum monthly salary at entry level would be Rs 6,660 and the maximum ---of a Cabinet Secretary and Service chiefs- would be Rs 90,000. Secretaries will get Rs 80,000. In a first of its kind, the commission recommended a performance related incentive scheme (PRIS) by which employees will be eligible for pecuniary remuneration over and above their pay. The PRIS will be budget neutral. "A scheme of PRIS (performance related incentive scheme) has been recommended... It should also work as a substitute for bonus, honorarium and overtime allowances," the report said. The panel, which presented the report to finance minister E Chidambaram, suggested that the number of grades be reduced to 20 from the existing 35.
Recommending a substantial increase in allowances and other benefits, the Commission suggest- ed a 40 per cent increase in pension and family pension. The Commission also favoured a market-driven compensation package to young scientist and posts requiring special expertise and skills, besides an enhanced pay scale for nurses, teachers, constabulary and postmen. Seeking a substantial hike in allowances, the Commission recommended payment of arrears in two instalments and said that out of the total one-time expenditure of Rs 18,060 crore, as much as Rs 12,642 crore will have to be borne in the Union budget and the balance of Rs 5,418 crore in the Railway budget. The recommendations will cost Rs 12,561 crore in 200809. The net financial implications are estimated to be Rs 7,975 crore for 2008-09. There would be an additional, burden of Rs 18,060 crore on account of payment of arrears. K.M. Chandrasekhar Cabinet Secretary Rs 30,000 Present salary Rs 90,000 Proposed salary Shivshankar Menon Foreign Secretary RS 26,000 Present salary Rs 80,000 Proposed salary Gen. Deepak Kapoor Army chief Rs 30,000 Present salary Rs 90,000 Proposed salary YS Dadwal, Delhi Police boss Rs 26,000 Present salary Rs 80,000 Proposed salary Others Chief Engineer, DDA Present Proposed Junior Engineer Rs 3 0 , 0000 0000 000 Principal Judge Government Doctor RS Rs 39,000T Nurse Primary Teacher Rs 12,000 Rs 17,000 Gross salary, based on higher end of basic salary figures
INCENTIVE SCHEME: Performance related incentive scheme (PRIS), making employees eligible for remuneration over and above pay. Budget-neutral scheme; to replace ad hoc bonuses. As good as it gets Coming: Handsome raises, performance-based incentives, more sensitive working conditions, larger pensions
RANGE OF SALARY: Minimum Rs 6,660; maximum RS 90,000. Most allowances doubled; education allowance up from RS 50 to Rs 1,000 per child per month. Bigger pensions after age 80.
FLEXIBLE INCREASES: All fixed allowances up for automatic revision whenever dearness allowance goes up by 50%. Consumer Price Index base year to be revised frequently. Travellip Allowance to increase in proportion to DA.
FEWER HOLIDAYS: Number of national holidays cut to 3. Five-day week to continue; restricted holidays up from 2 to 8.
GENDER SENSITIVE: Staggered working hours for women, special leave for childcare. Maternity leave up to 180 days; better accommodation in women's hostels. OPEN DOOR: Top posts to be filled from within/outside govt to get best domain expertise. Market-driven salaries specialists.
Recommending a substantial increase in allowances and other benefits, the Commission suggest- ed a 40 per cent increase in pension and family pension. The Commission also favoured a market-driven compensation package to young scientist and posts requiring special expertise and skills, besides an enhanced pay scale for nurses, teachers, constabulary and postmen. Seeking a substantial hike in allowances, the Commission recommended payment of arrears in two instalments and said that out of the total one-time expenditure of Rs 18,060 crore, as much as Rs 12,642 crore will have to be borne in the Union budget and the balance of Rs 5,418 crore in the Railway budget. The recommendations will cost Rs 12,561 crore in 200809. The net financial implications are estimated to be Rs 7,975 crore for 2008-09. There would be an additional, burden of Rs 18,060 crore on account of payment of arrears. K.M. Chandrasekhar Cabinet Secretary Rs 30,000 Present salary Rs 90,000 Proposed salary Shivshankar Menon Foreign Secretary RS 26,000 Present salary Rs 80,000 Proposed salary Gen. Deepak Kapoor Army chief Rs 30,000 Present salary Rs 90,000 Proposed salary YS Dadwal, Delhi Police boss Rs 26,000 Present salary Rs 80,000 Proposed salary Others Chief Engineer, DDA Present Proposed Junior Engineer Rs 3 0 , 0000 0000 000 Principal Judge Government Doctor RS Rs 39,000T Nurse Primary Teacher Rs 12,000 Rs 17,000 Gross salary, based on higher end of basic salary figures
INCENTIVE SCHEME: Performance related incentive scheme (PRIS), making employees eligible for remuneration over and above pay. Budget-neutral scheme; to replace ad hoc bonuses. As good as it gets Coming: Handsome raises, performance-based incentives, more sensitive working conditions, larger pensions
RANGE OF SALARY: Minimum Rs 6,660; maximum RS 90,000. Most allowances doubled; education allowance up from RS 50 to Rs 1,000 per child per month. Bigger pensions after age 80.
FLEXIBLE INCREASES: All fixed allowances up for automatic revision whenever dearness allowance goes up by 50%. Consumer Price Index base year to be revised frequently. Travellip Allowance to increase in proportion to DA.
FEWER HOLIDAYS: Number of national holidays cut to 3. Five-day week to continue; restricted holidays up from 2 to 8.
GENDER SENSITIVE: Staggered working hours for women, special leave for childcare. Maternity leave up to 180 days; better accommodation in women's hostels. OPEN DOOR: Top posts to be filled from within/outside govt to get best domain expertise. Market-driven salaries specialists.
Times of India says, Link government employees’ pay to performance
The Sixth Pay Commission headed by Justice B N Srikrishna has submitted its recommendations to the finance minister. The proposals, now officially revealed, confirm earlier newspaper reports that central government staff along with their counterparts in defence and paramilitary forces could get hikes of up to 52 per cent in salaries. There is indeed a genuine case to increase salaries of government employees, but this has to be linked to better performance and their playing genuinely productive roles. The present hike, however, is across the board and there doesn’t seem to be any realistic link to performance.
Steps need to be taken so that the enormous funds spent on the government’s wage bill are utilised efficiently. It is unfortunate that political parties in power use the pay commission as a tool to placate the massive vote bank among the babus. They dole out the pecuniary benefits alone without carrying out the administrative reforms suggested by successive commissions for increasing efficiency.
The pay hike will bring about massive strain on the exchequer. With the implementation of the fifth pay commission’s recommendations, the central government’s wage bill shot up by nearly 99 per cent. The present recommendations, when implemented, are expected to cause an additional annual encumbrance of Rs 20,000 crore.
Higher salaries should, as a natural corollary, bring about more efficiency. The government must learn from the private sector, which is far more efficient because its salaries, perks and promotions are linked to productivity. Market salaries will help to attract talent to the government in competition with the private sector. The government’s aim must be to become a lean organisation. A truly efficient bureaucracy will require less people. Many of the positions in our bureaucracy do not exist in advanced societies. A lot of work done currently by babus can be outsourced to private firms. The government should reduce the number of clerks, secretaries and peons and downsize itself.
While it may be that because their salaries are out of sync with the market that there is a high propensity for corruption among the babus, hiking their salaries alone won’t work. They should be made more accountable. The private sector is less corrupt because it has more accountability. The salary hike should be approved only after taking steps to improve organisational competence. If not, the pay hike will be another affliction on the economy, which is already slowing down.
Steps need to be taken so that the enormous funds spent on the government’s wage bill are utilised efficiently. It is unfortunate that political parties in power use the pay commission as a tool to placate the massive vote bank among the babus. They dole out the pecuniary benefits alone without carrying out the administrative reforms suggested by successive commissions for increasing efficiency.
The pay hike will bring about massive strain on the exchequer. With the implementation of the fifth pay commission’s recommendations, the central government’s wage bill shot up by nearly 99 per cent. The present recommendations, when implemented, are expected to cause an additional annual encumbrance of Rs 20,000 crore.
Higher salaries should, as a natural corollary, bring about more efficiency. The government must learn from the private sector, which is far more efficient because its salaries, perks and promotions are linked to productivity. Market salaries will help to attract talent to the government in competition with the private sector. The government’s aim must be to become a lean organisation. A truly efficient bureaucracy will require less people. Many of the positions in our bureaucracy do not exist in advanced societies. A lot of work done currently by babus can be outsourced to private firms. The government should reduce the number of clerks, secretaries and peons and downsize itself.
While it may be that because their salaries are out of sync with the market that there is a high propensity for corruption among the babus, hiking their salaries alone won’t work. They should be made more accountable. The private sector is less corrupt because it has more accountability. The salary hike should be approved only after taking steps to improve organisational competence. If not, the pay hike will be another affliction on the economy, which is already slowing down.
Hike invites muted cheers from forces (Sixth Pay Commission for Armed forces)
They can graduate from plain old rum to premium whisky now. But scotch will still largely remain beyond their reach. It was only two cheers, muted ones at that, by the armed forces for the recommendations of Sixth Central Pay Commission.
Grappling with a severe shortage of officers and flopping miserably to attract enough youngsters with “officer-like qualities”, coupled with many seeking “premature retirement” for greener pastures, the armed forces were expecting a doubling of their salaries at the very least.
The jump is certainly there but it’s nowhere near their expectations, with the average hike roughly working out to be around 40%-50%. “The jump is much bigger at the entry-level and senior levels, not in the middle rung. Moreover, the hike for jawans is quite paltry,” said an Army officer.
But yes, the recommendation for a special military service pay (MSP), apart from running pay bands, doubling of special risk allowances and substantial hikes in rank pay, have brought some much-needed cheer to the forlorn ranks of Army, Navy and IAF.
The MSP for all personnel till the rank of Brigadier (Commodore in Navy and Air Commodore in IAF) will be at the rate of Rs 6,000/month for officers, Rs 4,200 for military nursing service officers and Rs 1,000 for personnel-below officer rank (PBOR). This is to compensate for the hardships specific to military life.
The top brass also have much to cheer about. The Army, Navy and IAF chiefs, for instance, have jumped from a Rs 30,000 fixed basic monthly pay to Rs 90,000, making them the highest paid government employees on par with the cabinet secretary. The pay commission has also proposed elevation of the director-general of the armed forces medical services to a secretary-rank officer, with a fixed salary of Rs 80,000 per month.
At the other end of the spectrum, a young Lieutenant (Sub-Lieutenant in Navy and Flying Officer in IAF) will begin in a running pay band, starting from Rs 14,360, with an additional Rs 5,400 as grade pay and Rs 6,000 as MSP. This adds up to Rs 25,760 as compared to the existing Rs 8,250 basic pay scale for a new Lieutenant.
“It’s a good beginning, but the going will not be as good as he goes up. While recruitment of ‘good’ may improve, the retention of ‘better’ in the middle ranks will continue to be a problem,” said an officer.
“The recommendations do not properly address the root cause behind the growing exodus of middle-rung officers like Lt-Cols and Cols, seeking premature retirement for the much higher corporate salaries,” said an officer.
Nevertheless, the running pay band proposal will at least address the problem of financial stagnation in the middle ranks of the armed forces, which have a steeply pyramidical structure, since it has been delinked from rank stagnation. Moreover, the pay commission has recommended the flying, submarine and Siachen allowances be doubled from the existing Rs 3,500 to Rs 7,000 depending on rank. This again does not meet the expectations of armed forces which wanted a four-and-a-half time increase.
The pay commission has also recommended doubling of allowances for special forces and those personnel deployed in high-altitude, field areas, counter-insurgency operations, sea-duty and the like.
It has also been proposed that the encashment of earned leave should be delinked from the number of years of service. This will make all defence personnel eligible for leave encashment of up to 300 days — given only to personnel with service over 22 years — at the time of retirement or discharge.
No more ‘sahayaks’ for paramilitary personnel
Keeping suraksha sahayaks could cost officers in paramilitary forces dearly. The Sixth Pay Commission has come down severely on the practice of using constables as sahayaks at office and home. It has recommended to the government that any officer found indulging in this practice should be punished and the salary of the constable would be recovered from the officer’s salary.
It was brought to the notice of the Pay Commission that officers of and up to the rank of commandant were allowed use of one constable for attending to telephones and looking after guests. PTI
Grappling with a severe shortage of officers and flopping miserably to attract enough youngsters with “officer-like qualities”, coupled with many seeking “premature retirement” for greener pastures, the armed forces were expecting a doubling of their salaries at the very least.
The jump is certainly there but it’s nowhere near their expectations, with the average hike roughly working out to be around 40%-50%. “The jump is much bigger at the entry-level and senior levels, not in the middle rung. Moreover, the hike for jawans is quite paltry,” said an Army officer.
But yes, the recommendation for a special military service pay (MSP), apart from running pay bands, doubling of special risk allowances and substantial hikes in rank pay, have brought some much-needed cheer to the forlorn ranks of Army, Navy and IAF.
The MSP for all personnel till the rank of Brigadier (Commodore in Navy and Air Commodore in IAF) will be at the rate of Rs 6,000/month for officers, Rs 4,200 for military nursing service officers and Rs 1,000 for personnel-below officer rank (PBOR). This is to compensate for the hardships specific to military life.
The top brass also have much to cheer about. The Army, Navy and IAF chiefs, for instance, have jumped from a Rs 30,000 fixed basic monthly pay to Rs 90,000, making them the highest paid government employees on par with the cabinet secretary. The pay commission has also proposed elevation of the director-general of the armed forces medical services to a secretary-rank officer, with a fixed salary of Rs 80,000 per month.
At the other end of the spectrum, a young Lieutenant (Sub-Lieutenant in Navy and Flying Officer in IAF) will begin in a running pay band, starting from Rs 14,360, with an additional Rs 5,400 as grade pay and Rs 6,000 as MSP. This adds up to Rs 25,760 as compared to the existing Rs 8,250 basic pay scale for a new Lieutenant.
“It’s a good beginning, but the going will not be as good as he goes up. While recruitment of ‘good’ may improve, the retention of ‘better’ in the middle ranks will continue to be a problem,” said an officer.
“The recommendations do not properly address the root cause behind the growing exodus of middle-rung officers like Lt-Cols and Cols, seeking premature retirement for the much higher corporate salaries,” said an officer.
Nevertheless, the running pay band proposal will at least address the problem of financial stagnation in the middle ranks of the armed forces, which have a steeply pyramidical structure, since it has been delinked from rank stagnation. Moreover, the pay commission has recommended the flying, submarine and Siachen allowances be doubled from the existing Rs 3,500 to Rs 7,000 depending on rank. This again does not meet the expectations of armed forces which wanted a four-and-a-half time increase.
The pay commission has also recommended doubling of allowances for special forces and those personnel deployed in high-altitude, field areas, counter-insurgency operations, sea-duty and the like.
It has also been proposed that the encashment of earned leave should be delinked from the number of years of service. This will make all defence personnel eligible for leave encashment of up to 300 days — given only to personnel with service over 22 years — at the time of retirement or discharge.
No more ‘sahayaks’ for paramilitary personnel
Keeping suraksha sahayaks could cost officers in paramilitary forces dearly. The Sixth Pay Commission has come down severely on the practice of using constables as sahayaks at office and home. It has recommended to the government that any officer found indulging in this practice should be punished and the salary of the constable would be recovered from the officer’s salary.
It was brought to the notice of the Pay Commission that officers of and up to the rank of commandant were allowed use of one constable for attending to telephones and looking after guests. PTI
Sixth Pay panel proposals will burn Rs 26,000cr hole in govt pocket
The implementation of the Sixth Pay Commission report for central government employees will cost the exchequer Rs 26,035 crore. This includes Rs 18,060 crore on payment of arrears.
The commission has submitted the report recommending for a retrospective implementation from January 1, 2006. According to the report, the recommendation will cost Rs 12,561 crore in the 2008-09 fiscal year. But, its implementation will also lead to a saving of nearly Rs 4,586 crore on account of various measures suggested by the commission. Therefore, the net financial implication of the recommendation contained in the report will be Rs 7,975 crore in 2008-09.
After the implementation, the total payout on account of salary and allowances of the central government will increase from the estimated Rs 27,897.30 crore to around Rs 54,000 crore in 2008-09, along with the arrears.
A senior economist says impact of the implementation of the recommendation will be on expected lines. It is likely to increase the fiscal deficit by around 0.5 percentage point to 3 per cent of the GDP from 2.5% of GDP estimated in the Budget.
But, on popular demand, even the state governments are likely to implement the same pay scale putting pressure on their fiscal condition as well. A senior economist said that the total fiscal deficit of the central and state governments is bound to rise by over one percentage point after the sixth pay commissions implementation. Payment of arrears will also lead to increase in the direct tax collections, on the flip side. But, as the government has introduced the new tax system, the total tax liability will be substantially low.
On the whole, delay in announcement of the pay commission report and a further delay in payment of arrears will help the government babus.
The commission has submitted the report recommending for a retrospective implementation from January 1, 2006. According to the report, the recommendation will cost Rs 12,561 crore in the 2008-09 fiscal year. But, its implementation will also lead to a saving of nearly Rs 4,586 crore on account of various measures suggested by the commission. Therefore, the net financial implication of the recommendation contained in the report will be Rs 7,975 crore in 2008-09.
After the implementation, the total payout on account of salary and allowances of the central government will increase from the estimated Rs 27,897.30 crore to around Rs 54,000 crore in 2008-09, along with the arrears.
A senior economist says impact of the implementation of the recommendation will be on expected lines. It is likely to increase the fiscal deficit by around 0.5 percentage point to 3 per cent of the GDP from 2.5% of GDP estimated in the Budget.
But, on popular demand, even the state governments are likely to implement the same pay scale putting pressure on their fiscal condition as well. A senior economist said that the total fiscal deficit of the central and state governments is bound to rise by over one percentage point after the sixth pay commissions implementation. Payment of arrears will also lead to increase in the direct tax collections, on the flip side. But, as the government has introduced the new tax system, the total tax liability will be substantially low.
On the whole, delay in announcement of the pay commission report and a further delay in payment of arrears will help the government babus.
Sixth Pay Commission suggests health insurance boost
The Pay Commission has recommended introduction of a health insurance scheme for employees and pensioners. The scheme would be available on voluntary basis subject to paying the prescribed contribution.
Contributions would be based on the actual premium paid. Group A, B and C employees would contribute 30%, 25% and 20% of the annual premium respectively with the government paying the remainder. The scheme has been recommended for government employees other than those working in railways. However, railways and defence, who have their own medical infrastructure, should also devise a similar scheme for their employees, the report suggested.
The commission said the insurance scheme would be compulsory for government employees who join service after the introduction of the scheme while new retirees would automatically get covered.
The new recruits and pensioners will consequently not be provided CGHS or such facilities. The new recruits and new retirees may be paid an appropriate amount for meeting their OPD expenditure till the time an insurance scheme for providing OPD facilities is devised.
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.
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.
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