SALIENT FEATURES OF SIXTH PAY COMMISSION RECOMMONDATIONS By -V.Natarajan Secy,WRPOA,BCT

1. SALIENT FEATURES OF SIXTH PAY COMMISSION RECOMMONDATIONS By -V.Natarajan Secy,WRPOA,BCT

2. Constitution of 6th CPC • The fifth pay commission had recommended that the sixth pay commission should be constituted by 2003, so that its recommendations are ready by 2006. But, the sixth pay commission was constituted on 5.10.06 and given about 18 months to submit the report ie by 31.3.2008 • The sixth pay commission had the with following members Justice S.N.Srikrishna, chairman Prof.Ravindra Dholakia, member J.S.Mathur, Member Smt.Sushmanath, member secretary aided by a secretariat of 17 officers • The members of 6th CPC Visited to 17 countries in around 18 months

3. Salient features • Implementation of pay scales w.e.f 1.1.2006 • Implementation of allowances prospectively ie.from date the recommendations are accepted/modified by the Govt. • To remove stagnation, introduction of running pay bands for all posts in the government below that of Rs.26000(Fixed) • Total grades reduced from 35 to 22 running across four running bands (PB-1 to PB-4) with distinctive grade pays. • All Gr`D’ categories to be upgraded to Gr`C’. Initially existing employees to be placed in pay scale 1-S for the purpose of initial fixation only. Gr`D’ staff who already possess the minimum qualification of metric to be placed in PB-1 w.e.f 1.1.06 and those who do not possess the required minimum qualifications to be retrained before absorption in PB-1. Further recruitment will be only from PB-1.

4. New pay structure

5. New pay structure

6. New pay structure

7. New pay structure

8. Pay fixation The VIth CPC in table 2.2.2 of the report has given the tables for fixation which is explained in the next slide

10. Formula for fixation of pay Generally the following formula has been adopted to work out the revised pay though this is not universal Your existing basic x 1.74 rounded off to nearest ten = new basic Note:- Multiplication factor of 1.74 is adopted considering 50% DP and 24% DA as on 1.1.06. Since we were getting DA on DP, it should have been 1.86 instead of 1.74 The commission has given their explanation for adopting for adopting the multiplying factor of 1.74 instead of 1.86 in 4.1.5 of the report which is as under:-The government merged 50% of DA with basic pay as D.P w.e.f 1.4.04 and dearness allowance even thereafter was continued to be calculated with reference to All India Consumer price Index for industrial workers average of 306.33 as on 1.1.1996 without changing the base to average index as on 1.4.04 consequent to the merger and as a result salaries of government servants were neutralized by more than 100%.

11. Formula for fixation of grade pay Generally the following formula has been adopted to work out the revised pay though this is not universal Grade pay = Max of the scale x 40% rounded off to nearest 100 Where two scales are merged, the maximum of the largest scale is considered.

12. Salient features of pay structure • Minimum salary at PB-1 is Rs.4860+1800(GP) = Rs.6660/- (considering 3 units) and maximum for cabinet secretary/equivalent is Rs.90,000/- Pm which is 1:13.5 (increased from from 1:11.76 in Vth CPC instead of reducing this gap in a socialistic society). • Every post barring secretary/equivalent and joint secretary/equivalent has a grade pay attached to it. Grade pay determines the status of the post with senior post given a higher grade pay. • Annual increments to be paid at 2.5% of the total pay in the pay band and the corresponding grade pay. The date of annual increments should be first of July and employees completing six months and above in the scale are eligible. • Another form of variable increment to group`A’ officers (PB-2 & PB-3) wherein 20% of high performers will be given increment at higher rate of 3.5%. Govt advised to extend this scheme to PB-1 & PB-2 as well. • At the time of promotion from one post to the other , the grade pay attached to the posts in different levels within the same running band to change. One increment to be given at the time of promotion. • Allowances will be based on grade pay and the allowances will increase by 25% when the DA exceeds 50%. • A person stagnating at the maximum of the scale for more than an year continuously to be placed in the next higher pay band without any change of grade pay.

13. Dearness allowance • DA was calculated with reference to All India Consumer price index for industrial workers . The %age increase is calculated from index of Jan’96 ie 306.33 (1982=100). Formula adopted is Before merger of DA -[(12 months average index)-306.33]/306.33 x 100 After merger of DA-{[(12 months average index)-306.33]/306.33}-50 x 100 • The present method of calculation of DA based is called Laspeyere’s fixed base methodology. The inflation index using this methodology captures the cost of buying a basket of goods (fixed in the base year) at current prices relative to the cost of buying the same basket of goods at base year prices. • However economic theories postulate that if a price of commodity increases viz-a-viz other goods the consumer adjusts his consumption basket to buy less of the goods- the prices of which have increased more and more of goods – the prices of which have increased lesser or has fallen. Further some new goods could also get included in his basket. The shift in consumption pattern is therefore not envisaged in the above formula. The chain based technique in calculation of the index for inflation considers change in quantity of the materials as well as their cost and therefore 6th CPC has recommended this method. The increase calculated by this method will be lesser than the existing method.

14. Dearness allowance • To switch over to chain based technique in calculation of index for inflation, the sixth CPC has recommended that the National statistical commission be asked to make a survey covering Govt employees and construct a consumption basket representative of govt employees and formulate a separate index and also review the basket of goods from time to time based on consumption. Chain based technique will be more complex as the pattern of consumption differs at different levels/grades of staff. • Till such time the Govt to keep revising the base year in the existing fixed based index method as frequently as possible. The base should be switched from 1982=100 to 2001=100. • No merging of DA with basic pay at any stage as increment is incremental.

15. Allowances House rent allowance The rates of HRA are as under:-

16. Allowances • Transportation allowance CCA is abolished and merged with transportation allowance whose rates per month are as under:- • The restrictions of 1Km distance from place of residence to office are lifted. • For physically handicapped the rates are double and in no case less than Rs.1000+DA thereon. • Officers in PB-4 who are eligible for staff car can draw transportation allowance of Rs.7000+DA thereon provided they give up their official vehicle for travel between residence and office.

17. Allowances • Travel entitlement while on tour/transfer The travel entitlement while on tour or transfer is as under:- • No change for travel outside india • In case of road travel between places connected by rail, travel by any means of public transport is allowed provided the fare by train for class entitled is not exceeded. • In case of road travel between places not connected by rail, travel by AC buses for all entitled by 2AC & above in train and deluxe and ordinary buses for those entiled for first class/AC III tier/AC chair car/sleeper class

18. Allowances • Entitlement of daily allowance The entitlement of daily allowance is as under:- • In case of travel by government ship/boat or journey by foot/mules etc..daily allowance is to be paid at the rate of allowances of food bills. In this case amount will be sanctioned irrespective of the actual expenditure with approval of controlling officer/HOD. • For journey on foot, an allowance of Rs.5/- per Km will be payable additionally.

19. Allowances • Entitlement of transport on transfer The entitlement of transport on transfer is as under:- • Existing restriction that road transport cannot exceed rail cost by more than 1.25 times is lifted. • For Andaman & Nicobar and Lakshadeep islands, the rate of transporting the entitled weight shall always be equal to prevailing rates prescribed for such transport in ships operated by shipping corporation of India.

20. Allowances The rates of hill area, Bad climate & tribal allowance per month are as under:- The rates of remote locality allowance per month are as under:- The rates of project allowance per month as under:-

21. Allowances Educational allowance Educational allowance :- Max of Rs.1000/- Pm per child up to two children Hostel subsidy :- Max of Rs.3000/- pm per child up to two children Risk allowance For those engaged in risky occupation, free medical & life insurance will be as under:- • Amount of insurance to be increased to 50% once DA goes up by 50% • Additional health checkup every quarter and enhanced leave for recuperations. • Minimise risk by technology

22. Allowances Non-practicing allowances for doctors 25% of aggregate of basic pay and grade pay subject to the condition that basic pay & NPA does not exceed Rs.85,000/- Deputation allowance Will continue at rates of 5%, 10% & 15% of pay & grade pay without any pecuniary limits. But the aggregate of pay & allowance not to exceed Rs.39,200/- being the maximum pay in pay band-4 Other allowances Cycle allowance up from Rs.30/- Pm to Rs.60/- Pm Washing allowance up from Rs.30/- Pm to Rs.60/- Pm All other allowances to be doubled.

23. Over time & Bonus OVER TIME • The fifth pay commission had recommended abolition of OT to all category of staff except staff car driver, operational staff and industrial employees and all other staff except supervisory staff should be given compensatory rest instead. This was not accepted by the government & status quo was maintained. • Now the sixth pay commission has also recommonded abolishion of OT to all categories of staff except operational & industrial staff who are governed by statutory provisions. BONUS • The Productivity linked bonus should be gradually replaced by Performance related incentive scheme. Till such time the PLB should be continued in a modified manner where formula for computing the bonus has a direct nexus with increased profitability/productivity under well defined financial parameters. The existing formula is detailed in para 4.4.11 of the report (page 265 & 266 of the report). The new formula for calculation of PLB for the railway is given in annexure 4.4.1 of the report (page 84 of annexure)

24. HOLIDAYS • Govt offices to be closed only on 3 national holidays (26/1, 15/8, 2/10) • Restricted holidays to be increased to 8. • HOD has powers to declare office closed to a maximum of two restricted holidays in a year on local considerations to be decided at beginning of the year in consultation with staff side. • CL, LAP & HLAP remains unchanged. • 12 CLs for physically challenged. • HLAP now allowed to Railway school staff

25. ADVANCES • All Interest free advances to be doubled. • Advances for typewriters (being outdated) and table fans (available only to Gr`D’ which is now gradually abolished) which were available interest free to be discontinued. • The advances for bicycle and clothing which were not interest free now to be made interest free. • The advances which are not interest free to be dispensed hence forth and govt should enter into agreements with leading PSU banks to extend the facility at predetermined competitive rates. An interest subsidy of 2% as applicable to bank of employees and interest subsidy of 4% for physically challenged as applicable in banks to be given. The employee will take advances directly from the bank after taking approval of competent authority and repay installments directly to the bank. The existing limit of these advances to be doubled. The limit should be increased by another 25% when DA goes up to 50%. • The eligibility for taking advances which are not interest free should be removed and this will be decided by the bank as per repayment capacity at the time of processing loan application. This will also extend to the ceiling of 18 lacs presently prescribed on cost of house for purpose of HBA and this ceiling should also be removed.

26. FACILITIES FOR WOMEN EMPLOYEES • Staggered working hours giving flexibility to work early or late. Under this scheme 11.00 Hrs to 16.00Hrs will be the core working hours during which all women employees should be present. They will have the option of either coming either up to 1 ½ Hrs earlier or leaving up to two hours late depending upon the actual time they have clocked in. The time may be adjusted if office have different working hours. • Child care leave up to 2 years ( 730 days) for taking care up to 2 children at the time of need like examination, sickness etc. Child care leave should also be allowed for the third year as leave not due. However no child care leave can be given once the child is more than 18 years old. • Setting up of day care centres/creaches on contributory basis in offices where employees have preschool/primary school going children • Maternity leave to be increased from 135 days to 180 days up to two children. Further leave up to two year period in continuation can be availed instead of existing one year period. • Working hostel for women during initial years of service. • Service conduct rules for protection of women • 50% of transfer grant on transfer if transfer of either of the spouse takes place within six months but not lesser than 60 days

27. FACILITIES FOR HANDICAPPED • No of casual leaves to be 12 instead of 8. • Aids and appliances like hearing aids, dictaphones, braille writing equipments CDplayer, tape recorder, low vision aids and other learing equipments to be provided free of cost to discharge official duties better. • Barrier free entries at all places • Higher subsidy (4%) for loans • Liberal flexi hours of employment. • Special allowance for child care of Rs.1000/- per month for women with disabilities payable from the time of child birth up to two years and for two children. • Transport allowance at double the normal rates subject to minimum of Rs.1000/- per month. • Modifications in extant provisions to provide for government providing 50% of the cost exceeding the prescribed limits in case the employees with disabilities opts for better quality prosthetic aids/appliances whose value exceeds the prescribed limit • A proper grievance redressal machinery to be set up in each office where one or more employees with physically handicapped are posted

28. Group insurance & PF • Rate of monthly subscription and insurance covered shall be as under:- • Investments in Central Provident fund to be made voluntary.

29. HEALTH • Health insurance scheme to employers and pensioners on voluntary basis with contribution of 30%, 25% & 20% by Gr`A’, `B’ & `C’ employees with government paying the remainder. The arrangement to be reviewed periodically. • Health insurance scheme to be made compulsory for new employees who will be joining service after introduction of the scheme. Similarly new retirees after introduction of the scheme would be covered under this scheme. The new recruits and these retirees will not be provided with CGHS/CS(MA) facilities, but will be provided an appropriate amount till insurance scheme for OPD facilities are devised. • Serving employees & existing pensioners can opt out of CGHS and subscribe to insurance scheme and make their own arrangements for OPD needs and will be provided an appropriate amount till insurance scheme for OPD facilities are devised.

30. RETIREMENT BENEFITS • Pension at 50% of 10 months average pay or last pay drawn which ever is higher without any reference of qualifying service of 33 years for full pension to enable railway servants to leave service at an young age if they have opportunities outside and simultaneously government will be able to tap best available expertise for senior positions from within and outside. Benefit of adding qualifying service of five years will no longer be applicable. • Pension & family pension to be increased to pensioners as under:- • Commutation calculations modified as per annexure 5.1.2 of the report and to be reviewed periodically based on interest rates and morality rates. This activity of making payments should be outsourced to any PSU bank which would extend the commutated amount to pensioners and get appropriate rate of interest on such amount. Government could extend an interest subsidy on the interest rates so charged. • No change in maximum %age of commutation allowed or in period of restoration(15 Yrs)

31. RETIREMENT BENEFITS • Maximum pecuniary limit for gratuity to be increased from limit of Rs.3.50 lacs to Rs.10.00 lacs • No change in the maximum no of earn leave that can be accumulated ie 300 days. However the no of earn leave encashed while in service to be excluded from the overall ceiling of encashment of 300 days earn leave at the time of retirement • Both earned leave & half pay to be considered for encashment of leave subject to overall ceiling of 300 days. Half pay leave leave will be encashable at the rate equal to half the amount of leave salary payable during earned leave without any reduction made on the amount of pension payable. To make up short fall of earned leave, no commutation of half pay leave will be permissible • In case of Govt employee dying in harness, family pension may be paid at enhanced rates for period of 10 years. The dependency criteria will be minimum family pension along with dearness allowance thereon. This should be followed in cases relating to payment of family pension as well. • For 100% disability attendant allowance to be provided on same lines being provided to defense personals. • Rates of exgratia to be doubled and raised to Rs.10 lacs for death on accidents in course of performance of duty attributable to acts of violence of terrorists, antisocial elements etc.. And Rs.15 lacs in case of enemy action in international war or skirmishes on borders, militant acts, extremists in border posts, extreme climate conditions at high altitudes, inacessable border posts etc..

32. RETIREMENT BENEFITS • The fixation for pensioners is given in table 5.1.1 of the report and in no case this shall be lower than the sum of 50% of the minimum of the pay band and the grade pay thereon corresponding to the pre-revised pay scale in which the pensioner had retired. • Medical facilities to be provided to dependent daughters irrespective of their age on par with the facilities provided for dependent sons.For purpose of the medical facilities, the definition of family to be expanded to cover minor & dependent children of the widowed/divorced daughters. • For family pension & other related benefits widowed daughters to be placed in first category. • For encashment of leave for persons dying in harness,the amount shall be paid to the relatives in following order. Widow or eldest surviving widow or husband, eldest surveying son or adopted son, eldest surviving unmarried daughter, eldest surviving widowed daughter, father, mother, eldest surviving married daughter, eldest surviving brother below 18 years of age, eldest surviving unmarried sister, eldest surviving widowed sister and eldest child of eldest predeceased son. • Childless widow of deceased govt employee to be paid family pension even after remarriage subject to the condition that family pension will cease once her independent income from all sources becomes equal or higher than minimum prescribed family pension in Central Govt. • All central government employees opting to voluntarily retire after 15 years service, should be paid one lumpsum retirement benefit equal to 80 months slary last drawn/ average salary during preceding 12 months which ever is higher.

33. Other features Improvised entry grades Shift from career based selection to post based selection in higher echelons of the government to get best domain based expertise. For Gr`B’ & `C’ a fast track promotion mechanism by LDCE. No more cadre reviews for up gradations. Creation of additional posts in SAG & above to be strictly on functional considerations and these posts created outside the cadre to be filled by method of open selection. Up gradation for categories like nurses, teachers, constabulary & postmen looking into their importance in work. Bunching of pay only where higher higher start has been recommended like for Gr`A’ entry grade and band pay of 4860-20200 where Gr`D’ staff will be accommodated. Incase where employees have been placed under higher pay scale between 1.1.06 & date of notification of revised pay bands, employees can be given option to switch over to revised pay band and grade pay from date of promotion or up gradation. Decadering with 20% in grades SAG & above to be filled from any source by the government. If this is done in any service 20% posts will be allowed in non-functional basis in addition to the existing posts to be filled up by promotions from lower grades. Promotions for HAG on non-functional basis w.e.f 1st Jan when officer becomes due not withstanding any delay in DPC. Design & planning allowances for Eng officers in planning/design wings to be doubled.

34. THANKS