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7th Pay Commission: Post Cabinet approval 55 lakh government employees to benefit

By Vicky

Over 55 lakh central government pensioners will benefit after the Union Cabinet approved the new pension plan under the 7th Pay Commission. The Cabinet on Wednesday approved modifications in the 7th Central Pay Commission recommendations on pay and pensionary benefits. The benefit would be available with effect from January 1 2016 and with the increase approved by the Cabinet, the annual pension bill alone of the Central Government alone will be Rs 1,76,071 crore.

It may be recalled that in June 2016, the Cabinet had approved the implementation of recommendations with an additional financial outgo of Rs 84,933 crore for 2016-17 which included arrears for 2 months of 2015-1016.

Benefits from 7th Pay Commission

Benefits from 7th Pay Commission

The approval by the Cabinet would entail an additional benefit to the pensioners and additional expenditure of around Rs 5,031 crore for the years 2016-17. It would benefit over 55 lakh pre-2016 civil and defence pensioners and family pensioners.

Pensions of pre-2016 pensioners were revised as per the second formulation multiplying existing pension by a fitment factor of 2.57, though the pensioners were to be given the option of choosing the more beneficial of the two formulations as per the 7th CPC recommendations.

The benefit would be available

The benefit of the proposed modifications will be available with effect from 1st January, 2016. With an increase approved by the Cabinet, the annual pension bill of the Central Government will be around Rs 1,76,071 crore.

More scientific

More scientific

The Cabinet accepted the recommendations of the Committee that suggested revision of pension based on information contained in the Pension Payment Order which is issued to every pensioner.

The revised procedure of fixation of notional pay is more scientific and implementable in all cases. The Committee gave its findings after analysing several cases.

The modified formulation will be beneficial to more pensioners than the first formulation recommended by the 7th CPC, which was not found to be feasible to implement on account of non-availability of records and anomalies.

Defence pension

Defence pension

The decision on disability pension for Defence pensioners will not just benefit existing pensioners but also the future ones. This would entail an added expenditure of Rs 130 crore.

The issue of disability pension was referred to the National Anomaly Committee by the Defence Ministry. This was done following a representation by the Defence forces to retain the slab-based system, as it would have resulted in reduction in the amount of disability pension for existing pensioners and a reduction in the amount of disability pension for future retirees when compared to percentage-based disability pension.

The Cabinet on Wednesday approved the retention of percentage based regime of disability pension implemented after the 6th Pay Commission. The 7th Pay Commission had recommended that it be replaced by a slab system.

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