Anomalies in Pension of Pre-2006 HAG / S-30 Grade Pensioners of Organised Group ‘A’ Services

1. 7th CPC has recommended pension formulation of past civilian employees retired prior to 01.01.2016, based on notional pay of the retiree which will be the minimum of the Level in the Pay Matrix corresponding to the Pay Band and Grade Pay at which he/she retired, duly raised by adding number of increments earned in that Level while in service, at the rate of three percent. The revised pension computed based on these parameters, i.e. minimum of the Level in Pay Matrix and number of increments earned in that Level will not be reasonable and will not impart due justice to pre-2006 HAG / S-30 grade pensioners of Organised Group ‘A’ Services. The pre-2006 pensioners of HAG / S-30 grade retired from Organised Group ‘A’ Services have been put to a great disadvantage compared to the pensioners of junior Levels and compared to post-2006 pensioners of the same Level who retired after getting non functional financial upgradation (NFFU) to the scale of HAG / S-30 grade in 2006 onwards, on implementation of 6th CPC recommendations. The issue needs to be examined in view of following submissions and remedial action taken so that the method of formulation of pension is not unreasonable and discriminatory to the above mentioned class of pensioners.

2. The revised pay scales for all Levels including Level 15 of 7th CPC Pay Matrix are based on implemented pay scale of 6th CPC. Anomaly in any of the implemented pay scales of 6th CPC therefore gets carried forward to the revised scale of that Level in 7th CPC Pay Matrix. Level 15 of the 7th CPC Pay Matrix corresponds to the scale of HAG and S-30 grades of 6th CPC and 5th CPC respectively. In connection with the anomalies in the implemented scale of HAG grade of 6th CPC, the following is relevant.

a. The pay scales of HAG / S-30 and HAG+ / S-31 have always been almost identical. The minimum of both the scales has always been same throughout right upto 5th CPC. The maximum of HAG+ / S-31 has, however, been slightly more than the maximum of HAG / S-30 scale. These scales from 3rd CPC to 5th CPC were as under:

HAG / S-30 HAG+ / S-31

3rd CPC 3000 Fixed 3000 – 3500

4th CPC 7300 – 7600 7300 – 8000

5th CPC 22400 – 24500 22400 – 26000

b. 6th CPC had recommended both these scales in the Pay Band PB 4 with Pay 39200 – 67000 and Grade Pay of 11000 for S-30 and 13000 for S-31. The difference in the recommended scales was 2000 only.

c. Both S-30 and S-31 scales were almost same in 6th CPC recommendations with slight difference of 2000, due to the following reasons:

i. S-30 and S-31 both grades were direct promotional grades from S-29, with the same experience of 3 years in S-29 grade.

ii. Promotion from both S-30 and S-31 to the next grade, i.e. S-32 was admissible directly. The experience required for promotion from either of these grades was same, which was 2 years.

iii. Wherever there was provision for promotion / upgradation from S-30 to S-31 scale, experience required in S-30 grade was nil.

d. During implementation stage of 6th CPC, S-30 and S-31 scales were taken out of PB 4 Pay Band and were placed in separate scales of 67000 – 79000 for S-30 and 75500 – 80000 for S-31 with no grade pay. At this stage, a substantial difference in starting pay of these scales, which was never there earlier, occurred. This had no justification keeping in view submissions at sub-paras (a) to (c) above and was unjust and discriminatory.

e. The pay scales of S-29 and S-30 grades from 4rd CPC to 6th CPC were as under:

SAG / S-29 HAG / S-30

4th CPC 5900 – 7300 7300 – 7600

5th CPC 18400 – 22400 22400 – 24500

6th CPC 37400 – 67000 plus 10000 Grade Pay 67000 – 79000

Upto 5th CPC, the officers of S-29 grade always got less/equal pay than S-30 grade. Consequently retirees from S-29 grade could never get higher pension than S-30 retirees. After implementation of 6th CPC w.e.f. 2006, the scale of S-29 extended upto 77000 (67000 pay in the band + 10000 grade pay) whereas the minimum of S-30 scale was 67000. After 2006, the retirees of S-29 scale, drawing pay above 67000 upto 77000, got pension above 33500 upto 38500, which was more than the admissible pension of 33500 of S-30 scale retirees at the rate of fifty percent of 67000, the minimum 6th CPC pay of the scale. The equation between the pension of S-29 and S-30 scale retirees thus got disturbed for the first time, when lower scale S-29 retirees got more pension than higher scale S-30 retirees, as the minimum pay of 6th CPC scale was less than the maximum of S-29 scale.

3. In view of submissions in para 2 above, the implemented 6th CPC pay scale for S-30 grade was anomalous with reference to both S-31 and S-29 scales. The justified and reasonable minimum pay of S-30 scale of 6th CPC should have been equal to the minimum of S-31 scale and not less than the maximum of S-29 scale which was 77000. Based on this justified minimum pre-revised pay of 77000, the revised pay scale of S-30 grade (Level 15 of Pay Matrix of 7th CPC) should have been 209500 (77000 x 2.72). Accordingly minimum revised pension for retirees of HAG / S-30 grade (Level 15 of Pay Matrix) at the rate of fifty percent of 209500 should be 104750.

4. After 2006, on implementation of 6th CPC scales, not only retirees from S-29 scale, even some of the retireesfrom S-26 and S-24 scales which were also in Pay Band PB4 and were two to three grades junior retired at pay exceeding 67000 and started drawing pension above 33500 which was more than the pension admissible to S-30 grade retirees. This being highly unreasonable, unjust and discriminative, the pre-2006 retirees from S-30 scale had to approach the courts for legal remedy. 

The issue came up for judicial scrutiny keeping in view the rules and legal position, reasonability, natural justice, constitutional provisions and various judgments of Apex Court on pension admissibility. CAT PB New Delhi in OA No. 937 / 2010 reviewed under RA No. 10 / 2015 between All India S-30 Pensioners Association and U.O.I. and High Court Patna in Civil Writ Case No. 10757 / 2010 between Shri MMP Sinha (a pre-2006 retiree from S-30 grade) and U.O.I., upheld that pre-2006 retirees of S-30 grade getting pension less than post-2006 retirees of lower grades is absolutely unreasonable, unjustified and against natural justice. 

The courts ordered that the pension of pre-2006 S-30 grade retirees should be stepped up to 38500 which the pensioners of lower grade were getting. As per courts’ verdict, based on pre-revised pension of 38500, therevised pension of S-30 retirees will be 98945 (38500 x 2.57). On implementation of 7th CPC scales in accordance with these judgments, the pension entitlement for S-30 grade (Level 15) pensioners has to be not less than what is admissible to post-2016 S-29 (level 14) retirees which is 109100 (fifty percent of 218200). Accordingly the justified revised pension of Level 15 / S-30 retirees should be 109100.

5. Before implementation of 6th CPC, promotions of the officers of Organised Group ‘A’ Service were much delayed as compared to those of IAS. 6th CPC commented that the huge time gap in promotion to various pay scales between Organised Group ‘A’ Services and IAS needed to be minimised and recommended that the officers of Organised Group ‘A’ Services should be given financial up gradation such that a particular batch of these services gets promotional scale of higher grade at various levels when any IAS officer of two year junior batch gets posted to the centre to those grades / levels. Based on these recommendations, from 2006 onward, 

Non Functional Financial Up gradation (NFFU) was given to the officers of Group ‘A’ Services on non functional basis and the upgraded officers continued to work in the lower grade posts from which they were upgraded though given the promotional scale of the higher post. With NFFU, after 2006, the officers’ pay got upgraded to the next promotional scale much earlier than prior to 2006, when higher scale was available only on regular promotion to higher grade / post.

6. The same method of pension formulation based on increments earned in retirement scale of Level 15 (HAG / S-30) of the Pay Matrix recommended for both, i.e. pre-2006 regular promotees to the grade and to post-2006 promotees who were upgraded to the same scale under NFFU after 2006, is therefore unjust for pre-2006 regular promotees who have been put to a great disadvantage. Pre-2006 promotees to HAG / S-30 grade (Level 15 of Pay Matrix) were promoted to HAG / S-30 grade against the vacant posts in higher grade and the entire period spent in the scale was much less, the maximum being around three years. 

The increment earned by them ranged from nil to two and as per 7th CPC formulation, their notional pay will range from 182200 to 193300 and revised pension will range from 91100 to 96650. As far as post-2006 promotees to HAG / S-30 grade are concerned, they were granted NFFU from SAG / S-29 grade on non functional basis to the higher Level scale tenable by HAG / S-30 grade officers irrespective of availability of posts in that grade in the year in which two years junior IAS officers batch got promotion to that grade. The period spent in the scale by them was around six years during which they were either functioning in the post of SAG / S-29 (Level 14) or could have got regular promotion / higher post for part of the period. 

These officers earned at least five increments in the higher Level unless they retired earlier and the period when they were working in lower posts is also being counted towards the increments earned in Level 15. As per 7th CPC formulation, their notional pay will be at least 211300 in recommended scale at Level 15 of Pay Matrix and pension will be 105650 minimum against the entitlement of 91100 to 96650 for pre-2006 promotees in that Level.

7. All the pensioners promoted before 2006 or upgraded after 2006 to the same Level, i.e. Level 15 form the same class of past pensioners having joined the same service through the same recruitment procedure and having retired at the same Level. Entitlement of different pensions to these two group of officers who are of the same class is unreasonable. The group of post-2006 promotees were not holding higher post for the entire period for which increments are being considered in the formulation of pension. 

The method of 7th CPC pension formulation is therefore discriminatory to pre-2006 promotees to the scale. In the past, the Apex Court has struck down any such unreasonable, unjust and discriminatory pension entitlement of the past pensioners. With a view to provide justice to pre-2006 pensioners of HAG grade (Level 15), their minimum notional pay needs to be stepped up by maximum number of increments drawn by post 2006 officers, upgraded under NFFU to HAG / S-30 scale from the year 2006 onward, for the period they functioned in the lower post of SAG / S-29 or upto one year of their regular promotion / placement in posts tenable by higher grade of HAG. The revised minimum pension should be according to this stepped up notional pay.

8. In view of foregoing, the reasonable and just minimum pension entitlement of the pensioners of Organised Group ‘A’ Services, who retired from Level 15 (HAG / S-30) works out to be as under on the basis as mentioned against each:

a. 104750. As per minimum pay of 209500 for Level 15 of Pay Matrix based on reasonable and just minimum pay of HAG / S-30 in 6th CPC scale (para 2 and 3 refer).

b. 98945 (38500 x 2.57). As per pension entitlement of the past pensioners retired before 2016 from lower level, i.e. Level 14 of Pay Matrix (SAG / S-29 grade), based on pension of 38500 being drawn by them prior to 2016 (para 4 refers).

c. 109100. As per pension entitlement of the pensioners of lower level, i.e. Level 14 of Pay Matrix (SAG / S-29 grade) retiring in 7th CPC regime, i.e. 2016 onwards (para 4 refers).

Constitution of Empowered Committee of Secretaries for processing the Report of the Seventh Central Pay Commission-finmin orders

No.1-4/2015-E.III(A)
Government of India
Ministry of Finance
Department of Expenditure

New Delhi, dated the 27th January, 2016

OFFICE MEMORANDUM

Subject: Constitution of Empowered Committee of Secretaries for processing the Report of the Seventh Central Pay Commission
It has been decided with the approval of the Cabinet to set up an Empowered Committee of Secretaries to process the recommendations of the Seventh Central Pay Commission The Committee will have the following members

1.	Cabinet Secretary	–              Chairman
2.	Finance Secretary/Secretary (Expenditure)	–              Member
3.	Secretary, Department of Personnel & Training	Member
4.	Secretary, Department of Pension & PW	–              Member
5.	Secretary, Ministry of Home Affairs	–              Member
6.	Secretary, Ministry of Defence	–              Member
7.	Secretary, Department of Revenue	–              Member
8.	Secretary, Department of Posts	–              Member
9.	Secretary, Department of Health	–              Member
10.	Secretary, Department of Science & Technology	–              Member
11.	Chairman, Railway Board	–              Member
12.	Deputy Comptroller & Auditor General	–              Member
13.	Secretary (Security), Cabinet Secretariat	–              Member

2. The Committee may co-opt any other Secretary, whenever found necessary.

3. The Empowered Committee will function as a Screening Committee to screen the recommendations of the Commission after taking into account the views of the concerned stakeholders, viz, the Ministries/Departments, Staff Associations and the JCM, so as to firm up the final conclusions for approval of the Cabinet.

4. The Implementation Cell created in the Department of Expenditure shall function as Secretariat for the Empowered Committee of Secretaries.

5. The final recommendations of the Empowered Committee of Secretaries will be submitted for approval of the Cabinet.

Sd/-

(Annie George Mathew)
Joint Secretary to the Government of India

Signed copy click here

Change of Definition of OROP

   25^th January 2016

Shri Manohar Parrikar                                                                                   Hon’ble Raksha Mantri                                                                                   104, South Block, New Delhi

Change of Definition of OROP
in Various Correspondence of DESW Noticed

Dear Sh Manohar Parrikar Ji

Pl refer to:

1.   MOD letter no 12(01/2014-D (Pen/Pol) dated 26 Feb 14

2.   MOM of the meeting chaired by RM on 26 Feb 14 to discuss OROP

3.   Reply of MOS Defense Sh Rao Inderjit Singh Dated 2 Dec 14 in a written reply to Sh Rajeev Chandrashekhar in Rajya Sabha

4.   GOI press release dated 5 Sep 15

5.   GOI letter no 12(1)/2014 dated 7 Nov 15 and

6.   GOI letter no 12(01)/2014-D(pen/pol)- Part–II dated 14 Dec 15

GOI has accepted following definition of OROP in the letters dated 26 Feb 14 and MOS statement in Rajya Sabha dated 2 Dec 14.

One Rank One Pension (OROP) implies that uniform pension be paid to the Armed Forces Personnel retiring in the same rank with the same length of service irrespective of their date of retirement and any future enhancement in the rates of pension to be automatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners, and also future enhancements in the rate of pension to be automatically passed on to the past pensioners.

However in the Press Release dated 5 Sep 14, a phrase has been added at the end of the OROP definition “at periodic intervals”.

Definition of OROP given in 5 Sep Press Release is given below:

One Rank One Pension (OROP) implies that uniform pension be paid to the Armed Forces Personnel retiring in the same rank with the same length of service, irrespective of their date of retirement.Future enhancement in the rates of pension to be automatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners at periodic intervals.

This phrase has probably been added to justify pension equalisation every five years as is being propagated by the MOD.

Again, another attempt has been made to change/ distort the definition of OROP in GOI notification dated 7 Nov 15. OROP definition given in 7 Nov letter is reproduced below.

One Rank One Pension (OROP) implies that uniform pension be paid to the Defence Forces Personnel retiring in the same rank with thesame length of service, regardless of their date of retirement, which implies bridging the gap between the rate of pension of the current pensioners and the past pensioners at periodic intervals.

I am sure you would notice subtle progressive change in the language of definition of OROP, wherein the line “This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners, and also future enhancements in the rate of pension to be automatically passed on to the past pensioner” has been changed with the line “This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners at periodic intervals”.

It further states as one of the salient features that it has been decided that the gap between rate of pension of current pensioners and past pensioners would be refixed every five years.

This completely changes the definition of OROP and if implemented in its changed form, it will deprive past pensioners of monetary benefits and will completely destroy the definition of OROP and in turn, destroy the very soul of OROP.

UFESM (JM) believes that this change in the definition in OROP has been inserted only to justify pension equalisation every five years. Pension equalisation every five years is against the definition of OROP and is a matter of serious concern for all Ex-servicemen. The correct and acceptable situation is that pension equalisation must be done as soon as pension of two soldiers with same rank and same length of service is noticed to be different and it must be equalised immediately. Ex-servicemen are ready to accept pension equalisation every year only to make administration of this concept easily implementable. Incidentally, any computation can be easily achieved on press of a button in today’s computer era – and this needs no emphasis.

However the matter did not end at one instance of change of definition of OROP, it has been once again repeated in GOI letter dated 14 Dec 15 “OROP implies that uniform pension be paid to the Defence Forces Personnel retiring in the same rank with the same length of service, regardless of their date of retirement, which implies that bridging the gap between the rate of pension of current and past pensioners at periodic intervals”.

The GOI letter dated 14 Dec 15 is the notification for the formation of one-man judicial committee. It is a matter of great importance that if incorrect definition is given to the Chairman of anomalies committee, he is bound to work within the constraints given by MOD and will thus give his recommendations as per incorrect definition given to him. This will be gross injustice to ex-servicemen. Ex-servicemen might be justified to think that these changes are a planned move for the vexed problem of OROP in view of the past experiences in which meanings of Honorable Supreme Court orders were changed by making subtle changes in the decision of HSC.

We sincerely hope that these changes are probably only clerical errors and not a planned direction change. We therefore sincerely request you to correct these mistakes in definition of OROP and give following definition approved by Parliament to all committees.

One Rank One Pension (OROP) implies that uniform pension be paid to the Armed Forces Personnel retiring in the same rank with thesame length of service irrespective of their date of retirement and any future enhancement in the rates of pension to be automatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners, and also future enhancements in the rate of pension to be automatically passed on to the past pensioners.

We will be thankful to get a suitable reply from you at the earliest.

With regards,

Yours Sincerely,

Maj Gen Satbir Singh, SM (Retd)                                                      Advisor United Front of Ex Servicemen & Chairman IESM              Mobile: 9312404269, 01244110570                                          Email:satbirsm@gmail.com       

IESM LETTER TO RM ON OROP ANOMALIES

21st January 2016

The Raksha Mantri
South Block, Ministry of Defence
New Delhi

Urgent Need to Rectify Anomalies in OROP
in Govt notification dated 7 Nov 15

Dear Shri Manohar Parrikar ji

Please refer to Govt executive letter dated 26 Feb 14, press release dated 5 Sep 15, Govt notification dated 7 Nov 15 and 14 Dec 15. Please also refer to the statement made by MOS Defense Sh Rao Inderjit Singh in Parliament on 2 Dec in reply to question asked by Sh Rajeev Chandrashekhar regarding implementation of OROP. (All attached)

One Rank One Pension was approved by UPA Govt in budget dated 17 Feb 14 and then by NDA Govt in their budget dated 10 Jun 14. UPA Government issued an executive order dated 26 Feb 14 for the implementation of OROP dues to veterans at the earliest. This was never implemented by the MOD nor a demand note was ever raised. The approved definition of OROP by two Governments is given below.

One Rank One Pension (OROP) implies that uniform pension be paid to the Armed Forces Personnel retiring in the same rankwith the same length of service irrespective of their date of retirement and any future enhancement in the rates of pension to beautomatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners, and also future enhancements in the rate of pension to be automatically passed on to the past pensioners.

OROP implies that a senior rank soldier should never draw pension less than his junior rank soldier. This cardinal principle is the soul of OROP and must never be violated.

Government issued a notification on 7 Nov 15 for implementing OROP. Government reiterated above-mentioned definition of OROP in the letter but introduced some conditions in the notification that completely destroy the definition approved by two parliaments. These conditions have created four anomalies which completely violates the definition and thereby, the soul of OROP. These anomalies are discussed in detail in succeeding paragraphs.

1) Fixation of Pension on calendar year of 2013 instead of FY of 2014: Fixation of pension as per calendar year 2013 would result in past retirees getting less pension of one increment than the soldier retiring today. This will result in past retirees drawing lesser pensions than present retirees. This will completely destroy definition of OROP approved by two Parliaments and will also result in loss of one increment across the board for past pensioners in perpetuity.

2) Fixation of pension as mean of Min and Max pension: Fixing pension as mean of Min and Max pension of 2013 would result in more anomalies wherein same ranks with same length of service will draw two or more different pensions thus violating the very principle of OROP. This issue was discussed with RM in various meetings and after due deliberations it was decided that accepting highest pension of each rank in the year would meet the requirement as base of pension.

3) Payment wef 1st Jul 14 instead of 1st Apr 14: OROP has been approved in budget of 2014-15 by two parliaments. As per norms of Government, all proposals approved in budget are applicable from 1st April of that FY. In the case of OROP, the Govt had issued specific orders to its applicability wef 1st April 14. Hence implementation date for OROP from 1st July will be against the Parliament approval. Changing the date would result in loss of 3 months emoluments for OROP across the board. However, if OROP implementation date is to be kept as 1st July, then the base pension should also be accepted as per the PPOs of July 2014.

4) Pension Equalisation every five year: Pension equalisation every five year will result in a senior rank soldier drawing lesser pension than a junior rank soldier for five years thus OROP definition will be violated for five years. This will also result in permanent violation of definition as fresh cases will come up every year.

These anomalies will result in lesser pensions to widows, soldiers, NCOs and JCOs than what will be due to them on approval of OROP. This will result in veterans not getting OROP as per approved definition and will create large discontentment across all ranks.

There is a need to have a relook at the pensions of Hon Nb Subedars, Majors and Lt Cols.

a) Some Havildars are granted rank of Hon Naib Subedar in view of their exemplary service. These soldiers are not granted pension of Naib Subedar thus making the Hon rank just ceremonial. It is requested that Hon Naib Subedars should get pension of a Naib Subedar rather than that of a Havildar. Similarly, this must be accepted as a principle and it should be applicable to all Hon ranks in case of NCOs and JCOs.

b) There are only a few Majors as veterans. Moreover no officer is retiring in Major rank now. In the past, officers were promoted to Major rank after completing 13 yrs of service whereas present officers are getting promotion of Lt Col in 13 yrs. It will be justified to grant all pensioners of the rank of Major, minimum pension of Lt Col as they cannot be compared to present retirees as officers are not retiring as Majors any more. Number of such affected officers is not more than 800 and will not cause heavy burden to Govt.

c) Similarly, all pre-2004 retiree Lt Cols should get the minimum pension of full Col. Presently all officers retire in the rank of Colonel hence all Lt Col equivalents should be granted min pension of Colonels.

In view of above you are requested to rectify these anomalies and issue addendum to notification issued on 7 Nov 15 for implementation of OROP. We strongly believe that there will be no requirement of judicial committee for attending to anomalies creeping up in implementation of OROP. Grant of increase in pension in case of honorary ranks and Majors and Lt Col must also be approved as a good will gesture.

This letter is being signed by three major organizations with the approval of more than 200 organizations. List of such organizations is attached.

sd/- Lt Gen Balbir Singh Chairman IESL Advisor UFESM

sd/- Col Inderjit Singh Chairman AIEWA Chairman IESM

sd/- Maj Gen Satbir Singh Chairman UFESM Advisor UFESM

Hike the Basic Minimum pay by 44%

Implementing the recommendations of the 7th Central Pay Commission (7th CPC) is not going to be a cakewalk for the government.

The brewing discontent among st the central government employees is threatening to create a storm and disrupt the implementation process. The unions are asking around 44 percent hike on the basic minimum pay suggested by the 7th Central Pay Commission.

The 7th CPC had recommended the minimum pay at Rs 18,000 and the maximum pay at Rs 250,000, but the employee unions wants the minimum pay to be hikes from Rs 18,000 per month to Rs 26,000–a rise of around 44.4 percent.

The unions also said that the pay panel has recommended the lowest hike in basic pay since independence.

The unions argue that pay scales vary from states to states. They also want the minimum pay to be applied across all the states in the country.

The Central government employees’ unions have not only demanded to increase the minimum pay of central government employees, but also want government to review the salaries of central government employees after every 5 years instead of the current 10 years.

Late Implementation of Seventh Pay Commission

The announcement of a deferral is expected to be part of Jaitley's Budget speech on February 29

With a massive financial resource crunch estimated for 2016-17, the government is planning to defer the implementation of the 7th Pay Commission award.

Last week, the Union Cabinet approved the formation of an empowered committee of secretaries to work out ways for staggering the award through more than one financial year, instead of letting the Rs 1,02,100-crore bill from the implementation of the award come up at one go.

A top-ranked official said one of the options for the empowered committee was to defer the increase in allowances for central government employees, while letting the rise in pay for all scales to go through. According to finance ministry figures, the ratio of allowances to pay for these 4.7 million employees is 1:1.4. For instance, the Budget estimates in 2015-16 pegged the salary bill for all central government employees at Rs 60,731 crore, whereas the tab for allowances is Rs 84,437.4 crore.The step would allow Finance Minister Arun Jaitley to keep the Budget numbers for this financial year and the next close to the targeted 3.9 per cent and 3.5 per cent of gross domestic product (GDP) that he has committed himself to. For instance, even if the annual expenditure for 2016-17 were kept at about Rs 18 lakh crore (almost unchanged from Rs 17,77,477 crore in 2015-16), the Pay Commission recommendations would add another 5.5 per cent to it.

Given the sluggish pace of GDP growth and the almost negative deflator, the aggregate Budget numbers would otherwise be impossible to sustain on the back of the current trend in growth of tax receipts - just 50 per cent of the Budget estimates after the first eight months of the year, according to Controller General of Accounts data. The assumptions being worked on in North Block are that these might not change dramatically in the next financial year, too.

The announcement of a deferral is expected to be part of Jaitley's Budget speech on February 29. The formation of an empowered committee for the pay panel recommendations, again a first for the central government, is meant to bring all stakeholders on board in the exercise.

The official explained ministry-wise consultations with the department of expenditure in the finance ministry, in the run up to the Budget, were mostly over. Those discussions had proceeded on the assumptions that the Pay Commission recommendations would be implemented. It was now necessary to bring the secretaries of key departments on board about the need for a drastic cut-back on those estimates.

The status quo on allowances would also allow the government to ignore the demand made by various staff associations to raise the minimum level of salary for employees. The Pay Commission has suggested that the minimum should be Rs 18,000 per month; the unions have demanded that it should be raised to a band of Rs 19,000 to Rs 21,000 a month. Such a change would have created a ripple effect. About 70 per cent of the government employees are bunched in the non-executive ranks; the starting salary for them tops about Rs 42,000 a month, show calculations by the Commission. Even a modest increase in pay for them would cascade the bill for the government by another Rs 50,000 crore annually. The award of the Commission is slated to take effect from January 1 this year.

A key element in the plan to defer some elements of the 7th Pay Commission recommendations will be the railway ministry. Government managers reckon the powerful unions of the Indian Railways need to be brought on board for this plan to be successful. The higher wage bill for the Suresh Prabhu-led ministry works out to Rs 28,450 crore a year, only a shade less than the yearly loss it makes on its passenger services at present. No formal communications have been sent out to the railway unions by the committee. "It will follow once the empowered committee has decided to take a call on which allowances to clip," said the official.

In a recent television interview, Minister of State for Finance Jayant Sinha had said the Pay Commission recommendations were the biggest headache for his ministry, struggling to keep the aggregate expenditure of the Union government under control.

Pay Matrix Recommended by 7th CPC is not final and subject to change – Federation Sources

The Constituent Unions of NCJCM has called for three days’ agitation Programme from 19-1-2016 to 21-1-2016 to draw the attention of central government to settle the Modified charter of demands.

Recently they demanded the government to constitute an empowered Committee to settle their demands through negotiation. However, the Cabinet gave its approval for constitution of an Empowered Committee to study the 7th Pay Commission report for implementation Process.

We asked some Trade Union Leaders about their expectation from the Government in respect of 7th Pay Commission report. They told that so far they didn’t have any formal meeting over Pay commission report with Government after the report submitted by commission. When asked about their opinion about the Format of Pay Matrix recommended by 7th Pay Commission, they said ” We don’t think that the Pay Matrix recommended by 7th CPC is Final, we won’t accept the Fitment factor recommended by the Commission”

They said, “Of course there will be some anomaly would arise when it is in the process of implementation in respect of Pay Matrix . That cannot be anticipated now. As of now Anomalies in bunching and Promotion benefits are expected. But we think this Pay scale recommended in 7th pay commission report is not FINAL and subject to change. Because it needs concurrence from both the end.”

They added further ” The central government may accept this recommendation without any modification. Because the central government itself told after giving four-month extension to the Pay Commission that the Seventh Pay Commission would be mindful of the fiscal concerns. It indicates the Central Government intention. But the Central Government Employees’ Unions and Association are very much disappointed with this recommendation and we sought modifications in many recommendations. Our Federations declared it as retrograde recommendation. Hence it will not be easy for the central government to implement the report without doing any change in the recommendations”.

So the Unions Federations are not getting too much involved in 7th CPC Pay Scales. Because they are firm in their decision that percentage of increase recommended in minimum pay is far below the required level prescribed by Dr. Akhroid formula and 15th ILC norms for determining Minimum Pay and it need to be increased. However, NFIR has tried to establish that the take home pay is very much less when compared to previous pay commissions. If the Central Government accept to increase the Minimum Pay, then that would be the criteria for arriving subsequent pay scales. Hence expecting changes in Pay Matrix is inevitable.