7TH PAY COMMISSION REPORT: Pay Panel bonanza: Boon or bane?

7TH PAY COMMISSION REPORT: Pay Panel bonanza: Boon or bane?

On November 19 when Justice AK Mathur submitted the 900-page Seventh Pay Commission report to Finance Minister Arun Jaitley there were smiles on the face of 48 lakh Central Government employees and 55 lakh pensioners. However, amid all the ecstasy and celebrations, economists are divided in their opinion over the impact of an additional Rs 1.02 lakh crore burden on India’s economy at a time when the Government is struggling to cut its fiscal deficit. So will the 7th Pay Panel report be a boon for the BJP-led NDA-II Government or the move will boomerang on it like the “India Shining” campaign of the NDA-I regime? Bureaucracy Today analyses the issue.

The proposed 23.55 percent hike in the salaries and pensions of Central Government employees has alarmed a section of economists, ratings agencies and brokerages which warn of a dent in India’s finances though the other section and the Government express confidence that the fiscal deficit targets will not be breached.

The Commission has proposed a new pay matrix, replacing the existing pay bands and grade pay, for the Central Government employees and pensioners, with a monthly starting pay, inclusive of dearness allowance (DA), of Rs 18,000 and an apex level pay of Rs 2.5 lakhs. The starting pay now is Rs 7,000 per month and the highest salary is Rs 90,000 (fixed) excluding the DA which is 119% at present.


IMPACT ON FISCAL DEFICIT
Ratings agency Fitch says the recommendations, “if implemented in toto, could challenge the Government’s goal of achieving a fiscal deficit of 3.5 percent in 2016-17 unless its expenditure is cut or revenue raised”. Similarly, another international ratings agency, Standard & Poor’s, opines that the implementation of the Pay Panel proposals will “put pressure on the fiscal position of the Government and will act as a constraint to sticking to the roadmap for fiscal consolidation”.

However, former Reserve Bank of India Governor Bimal Jalan feels otherwise. “I don’t think the implementation of the Seventh Pay Commission recommendations will negatively impact the Government’s fiscal deficit. With the increase in employees’ income, consumption will also increase. If the consumption increases, the Government will earn more from Excise Tax, GST, etc. An increase in consumption will lead to an increase in Government revenue,” he tells Bureaucracy Today.

Echoing Jalan’s views, former Revenue Secretary Sunil Mitra says, “Our fiscal deficit is very much in control. Whether the implementation of the Pay Panel recommendations will impact the fiscal negatively, I cannot say. It may not really impact the fiscal deficit because the macro-economic fundamentals in the country are very good at the moment. Other than inflation in some food items, generally the prices are down.”

Earlier in February this year, Finance Minister Arun Jaitley had set the fiscal deficit target for the FY 2015-16 at 3.9 percent of the gross domestic product and said the Government would reduce the target gradually to 3 percent by FY 2017-18.

Brokerage firm Citigroup warns that in the backdrop of the Pay Panel recommendations, the Government might have to “make a cut in public investments” to achieve its fiscal deficit target, offsetting “the gains on economic activity somewhat”.

“The fiscal impact of the Seventh Pay Commission report, as with the previous ones, is likely to be felt over the next two years: 2016-17 and 2017-18,” says Sonal Varma of Nomura, a broking firm, in a research paper.

Seeking to allay the fears, Economic Affairs Secretary Shaktikanta Das says, “The Commission’s report was expected and the Government knew that it would take effect from January 1, 2016. Obviously the Government was not aware of its thinking. But the Government always has a broad estimation of what is going to be the impact of Pay Commission recommendations and accordingly internally a kind of risk matrix is prepared. The Government will deal with the situation. We will work out our numbers. So far as the fiscal consolidation roadmap is concerned, that will be maintained.”

Finance Secretary Rattan Wattal tells Bureaucracy Today, “While there is fear of some revenue shortfall, especially on the direct taxes front, the Government does not want to go in for any expenditure cuts to meet the deficit target. The FY16 plan spending target is realistic and reasonable.”


MORE BURDEN ON PUBLIC?
Though the Government is assuring the nation that the Pay Panel report will not affect the Indian economy, some experts argue that the State exchequer might have to shell out more with the Government likely to impose new taxes to meet its expenditure.

G Chokkalingam, Founder and Managing Director of the Mumbai-based Equinomics Research and Advisory, opines, “The additional income in the hands of Central Government employees will constitute about 0.5 per cent of a projected GDP in FY17 and may not give any boost to consumer goods manufacturers as a major part of this would be chucked away from them by revival in inflation rates and further higher duties (on fuels as long as the oil price remains subdued) and taxes (especially on services) likely to be imposed by the Government to meet its growing expenditure needs.”

However, Bimal Jalan seeks to disagree. “I don’t think that the public has to pay more taxes to meet the expenditure requirement. The impact of the Seventh Pay Panel report on the budget will not be substantial. I would not worry about that part. It is reasonable and can be handled,” the former RBI Governor told Bureaucracy Today.

Madan Sabnavis, Chief Economist of ratings agency CARE, says though the quantum of the recommended increase in the salaries and pensions of the Government employees is justified, the amount is quite large and “absorbing Rs 1 lakh crore is a big task”.


PRESSURE ON STATES
The impact of the SCPC recommendations in all its likelihood will trigger a similar demand in the States, a fact acknowledged even by Jaitley. The Union Finance Minister admitted at a business summit in Jaipur recently that the implementation of the 7th Pay Commission recommendations will put “slight” burden on the States’ expenditure.

Former Revenue Secretary Mitra also opines that though there will be pressure on the State Governments, it won’t be huge. “The State finances are much better than those of the Central Government. I don’t anticipate that SCPC recommendations will have a huge pressure on public finance or for that matter State finances. Most State Governments have improved their finances and are better placed than the Centre on the fiscal front,” Mitra tells Bureaucracy Today.

Echoing his views, Jalan articulates that the SCPC would significantly boost the Centre’s income tax collections which will also benefit the States as the Centre’s gross tax revenue needs to be shared with them.
However, Niti Aayog Member Bibek Debroy vehemently disagrees. “The repercussions of implementing the Seventh Pay Panel report will be serious on the States’ fragile finances. When starved of funds, the State Governments slash capital expenditure and the Pay Panel report will force the States to scale back their development spend,” Debroy tells Bureaucracy Today.

He also says the Railways, which is already reeling under financial constraints, will also suffer as the wages of its staff go up. Of the total Rs 1.02 lakh crore revised salary, the Union Budget will bear Rs 74,000 crore while Rs 28,000 crore will be borne by the Rail Budget.

Debroy’s apprehensions are not unfounded. “Most of the States are working around the 3% fiscal deficit number. Accommodating the additional pay increase would be a touch and go. A few weeks ago the Central Government put forward the Ujwal Discom Assurance Yojana (UDAY) under which the States are to restructure their debt-ridden Electricity Boards (SEBs). This means bearing some additional debt in the next two years. Depending on the timing of their Pay Committee recommendations, if any, the State Governments will have a sticker path to cross as they would have to address the necessity of higher salaries and the option of reforming the SEBs along with other pressures like spending partly on setting up Smart Cities and launching other programmes,” Madan Sabnavis says.


FUTURE UNCERTAIN
Though the Central Government has set up a “cell” to examine the Pay Panel recommendations, ambiguity remains as to how the Government will bring the Rs one lakh crore money to fund the increased salaries. The challenges are at multiple levels and very little has been said in the report about addressing them. The additional expenditure has to be compensated from somewhere. To fulfil the Fiscal Responsibility and Budget Management objective, the Government either has to increase its revenue or cut down its expenditure and this is where the problem lies. It will be a major challenge for the Finance Minister when he presents the FY2016-17 budget in Parliament. It is just a matter of few months before we know how well the Government has worked on its fiscal arithmetic. For the time being, let us hope that the Government does not further bend the back of the common man who is already facing the heat of spiralling prices.

Source: bureaucracytoday.com

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Employees can withdraw EPF money without employers permission

Now, employees can withdraw EPF money without employers’ permit

Employees can avail the benefit if details such as Aadhaar number and bank account number have been linked to the EPF UAN and their KYC verification has been done by the employer

New Delhi: Employees will no longer need the approval of their employers to withdraw money from their Employees Provident Fund (EPF) corpus.

If details such as Aadhaar unique identity number and bank account number have been linked to the EPF universal account number (UAN) and their know-your-customer (KYC) verification has been done by the employer, then the employees can avail themselves of the benefit of this hassle-free initiative immediately, the Employees Provident Fund Organisation (EPFO) said on Tuesday.

The state-run retirement fund manager also issued an order on Tuesday to all its field offices across India, instructing them to give effect to the order immediately.

In its quest to make EPFO a more subscriber-friendly organization, the retirement fund manager had delinked the employer from the process, central provident fund commissioner K.K. Jalan said.

Currently, employees need the approval of their employers to withdraw their EPF corpus, leading to unwanted delays on occasion.

Many employees have complained to the EPFO that organizations at times use their approval powers as a tool to harass them.

“Employees whose details like Aadhaar number and bank account number have been seeded into their UAN and whose UAN has been activated, may submit claims in Form 19, Form l0C and Form 31 directly to the commissioner without attestation of their employers, in such form and manner as may be specified by the central provident fund commissioner, for fast settlement of claims,” the EPFO order dated 1 December said.
Since October 2014, the government has allowed EPF number portability through UAN.

All active EPF subscribers have been allotted a UAN which needs to be linked to his Aadhaar and bank account numbers.

The employer verifies the details and approves the KYC details through a digital signature.

But in the past one year, not all EPF subscribers have activated their UAN on the EPFO portal, largely due to three key reasons—lack of awareness, pending KYC and lack of digital signature.

Of the over 40 million active subscribers, only 21 million have activated their UAN, as per data available with the labour ministry.

EPFO authorities said the simplified withdrawal process will work as a catalyst to persuade more employers to get their KYC done and activate their UAN.

“As a retirement fund body, we are now focusing on our subscribers. We are turning subscriber-friendly and hope more people can take benefit from it,” said Jalan, adding that as the corpus and the subscriber base grows, EPFO will continue to adopt new practices.

EPFO has a corpus of more than Rs.8 trillion—Rs.6 trillion directly under it and another Rs.2 trillion with exempted trusts and company trusts who manage their own EPF under the direct supervision of the EPFO. The corpus has been growing by 15% every year for the last couple of years.

Sharad Patil, secretary general of Employers Federation of India, said that the move looks “logical”. “If the withdrawal happens through Aadhaar and bank account, it will reduce the settlement period and also cut down the chance of corruption in the EPFO,” Patil said.

Source: Livemint.com

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Minimum Government and Maximum Governance

Minimum Government and Maximum Governance

A citizen friendly and accountable administration is the focus of the government. A series of steps to achieve this goal have been initiated. These include simplification of procedures, identification and repeal of obsolete/archaic laws/rules, identification and shortening of various forms, leveraging technology to bring in transparency in public interface and a robust public grievance redress system.

Doing away with the practice of submitting Affidavits for small level executive jobs in the Government and allowing Self-Certification of certificates is one important step in this regard. This has greatly led to the reduction in time and effort on the part of both the citizen as well as the officials in many Government offices.
Leveraging the power of information technology brings with it the advantage of transparency and speed for the benefit of the citizens. In this regard the Government has embarked upon a time bound Digital India Plan. The details of this plan are available on the Website of the Department of Electronics & Information Technology (www.deity.nic.in). As a part of Digital India Plan, the Department of Administrative Reforms & Public Grievances has been made the nodal ministry for implementation of e-Office in Central Ministries/Departments. The Department is regularly monitoring implementation of the e-Office project. The Ministry of Panchayati Raj has moved into 100% e-Office platform.

The Central Secretariat Manual of Office (CSMOP) has been revised and the 14th Edition of the CSMOP was brought in the form of e-Book form on 22nd May, 2015, which is available on the website www.darpg.nic.in. This is a much reduced and simplified version of the manual in comparison to the earlier editions. A number of redundant and repetitive literatures and words have been removed.

The Government of India has also taken a number of initiatives for improving ‘Ease of Doing Business’. The emphasis has been on simplification and rationalization of the existing rules and introduction of information technology to make governance more efficient and effective.

One of the focus areas of Government is to reduce the decision making layers to the minimum while allowing for faster means of information sharing/dissemination. The Government has launched a website mygov@nic.in and india.gov.in for this purpose. This is a citizen centric platform to empower people to connect with the Government and contribute towards good governance. Suggestions are also received on the PMO website. It also seeks expert advice from the people, thoughts and ideas on various topics that concern India. Citizens can join the discussion to share, debate and add value.

This was stated by Minister of State in the Ministry of Personnel, Public Grievances and Pensions and Minister of State in the Prime Minister’s Office Dr. Jitendra Singh in Lok Sabha today in a written reply to a question by Shri Nalin Kumar Kateel, Shri B.N. Chandrappa, Shri D.K. Suresh and Shri R.K. Bharati Mohan.

PIB

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Income Tax Department simplifies online rectification of TDS in ITR

Income Tax Department simplifies online rectification of TDS in ITR

New Delhi: Aimed at making life easier for tax payers, the Income Tax department today said it simplified the process of online rectification of incorrect details of tax deducted at source (TDS) filed in the income tax return (ITR).

Earlier, taxpayers were required to fill in complete details of the entire TDS schedule while applying for rectification on the e-filing portal of the I-T Department.

To avoid this, the finance ministry said a new facility has been provided for pre-fillin ..

To avoid this, the finance ministry said a new facility has been provided for pre-filling of TDS schedule while submitting online rectification request on the e-filing portal to facilitate easy correction or up-dating of TDS details.

“This is expected to considerably ease the burden of compliance on the taxpayers seeking rectification due to TDS mismatch,” an official statement said.

Errors due to incomplete TDS details in rectification applications were leading to delays in processing of such applications, thereby causing hardships to taxpayers, it added.

PTI

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7th Pay commission report on determination of minimum pay

7th Pay commission report on determination of minimum pay

7th CPC has fixed the Minimum Pay at Rs.18000/- as per Indian Labor Conference recommendations considering 3 units of a family of 2 + 2. The amount was arrived by the prices sourced from Labor Bureau, Shimla. 7th CPC claims that this amount is more than twice than that of a private sector employee.

Minimum Wage Fixed by 7th Pay Commission at Rs.18000/- and along with allowance proposed, total salary in the lowest cadre would be around Rs,22500

7th Pay Commission has fixed the minimum wages for the lowest cadre employee is Rs.18000 w.e.f 01.01.2016.

Determination of Minimum Pay

The first step in Wage Revision is to fix the  minimum wage that is required to be paid to the lowest ranked Staff to meet the expenditure for himself and his family in a dignified manner.

Minimum Pay Estimated by the V and VI CPC

V CPC adopted the ‘Constant Relative Income Approach’ which means the real minimum pay should grow in line with the cost of living and added to it the DA of Rs.1,110 to arrive at the ‘price protected’ minimum pay of Rs.1,860 as on 01.01.1996 and finally increased to Rs.2550 at the implementation stage.
To estimate the minimum pay in the government, the VI CPC used the norms set by the 15th Indian Labor Conference (ILC) in 1957 to determine the need-based minimum wage for a single industrial worker. The norms set by the ILC are as below:

i.      A need-based minimum wage for a single worker should cover all the needs of a worker’s family. The normative family is taken to consist of a spouse and two children below the age of 14. With the husband assigned 1 unit, wife, 0.8 unit and two children, 0.6 units each, the minimum wage needs to address 3 consumption units;

ii.      The food requirement were derived from the recommendations of Dr. Wallace Aykroyd, the noted nutritionist, which stated that an average Indian adult engaged in moderate activity should, on a daily basis, consume 2,700 calories comprising 65 grams of protein and around 45-60 grams of fat. The animal proteins, such as milk, eggs, fish, liver and meat, are biologically more efficient than vegetable proteins and suggested that they should form at least one-fifth of the total protein intake;

iii.       The clothing requirements should be based on per capita consumption of 18 yards per annum, which gives 72 yards per annum (5.5 meters per month) for the average worker’s family.

iv.      For  housing,  the  rent  corresponding  to  the  minimum  area  provided  under  the government’s industrial housing schemes is to be taken. The 15th  ILC kept it at 7.5 percent of the total minimum wage;

v.      Fuel, lighting and other items of expenditure should constitute an additional 20 percent of the total minimum wage.

As per Supreme Court Directives the VI CPC considered additional components of expenditure towards Children’s education, medical treatment, recreation, festivals and ceremonies which this amount at 25 percent of the total minimum wage calculated from the first five components.  Since Government is providing medical facilities to all its employees the VI CPC arrived at a minimum wage of Rs.5,479. This was enhanced by about 22 percent to Rs.6,660, which was recommended as the minimum pay in the government. The enhancement quantified the skill factor that Group D staff would acquire through training, upon their merger into Group `C’. Ultimately, at the implementation stage, the minimum pay was fixed at Rs.7,000 per month on 01.01.2006.


Demand made by JCM-Staff Side to the Commission

In  its  representation  the JCM-Staff Side has  submitted that the Commission must determine a ‘need-based minimum pay’.  In addition they have also sought the inclusion of a quantified skill factor on the lines of the VI CPC’s approach for addressing the merger of the Group D staff into Group `C’.  They insisted on seven components (five ILS components + additional 25 percent provisioning + skill factor).
JCM-Staff Side has reported that the minimum pay should be Rs.26,000 per month, as on 01.01.2014, the date from which it wants the Commission’s recommendations to be implemented.

Approach of the Commission

VI CPC adopted the 15th ILC norms to arrive at a base figure, to which was added additional 25 percent for various additional items plus the skill factor. The Commission has thus noted that directly or indirectly, the ILC norms have always been at the core of the minimum pay calculations made by the previous Pay Commissions. The Commission is also of the view that the ILC norms, along with other supplements (the entire set of seven components), are the best approach to estimating the minimum pay as it is a need-based wage calculation that directly costs the requirements, normatively prescribed to ensure a healthy and a dignified standard of living.

The 7th Pay Commission has estimated the minimum pay (the calculations for which have been tabulated below) through the following steps:

Step 1:   The food, clothing and  detergent  products  listed  and  their respective quantities specified by the 15th ILC have been adopted. These quantities indicate the monthly consumption of the listed products by a family comprising three consumption units. [For e.g. for the product ‘Dal’ the quantity specified for daily consumption is 80 grams per consumption unit per day. The monthly consumption of Dal by a consumption unit thus works out to 2.4 kg (80 x 30). Accordingly the monthly consumption of Dal by a family comprising 3 units is 7.2 kgs (2.4 x 3).]

Step 2:   The quantities have been multiplied by their respective product prices to arrive at product wise cost. The price of an item is the average of its prices prevailing in each month from July, 2014-June, 2015
The prices of all items have been sourced from Labor Bureau, Shimla. These prices are used in the calculation of the CPI (IW) and subsequently the calculation of Dearness Allowance. In the current exercise the prices of all items are for the period July 2014-June 2015 and have been used in the calculation of DA at 119 percent operative from 01.07.2015.

Step 3:   The cost of food, clothing and detergent products obtained from Step 2 has been divided by 0.8 to arrive at a total, of which 20 percent provides for fuel and lighting expenses.

Step 4:   The cost estimated from Step 3 is divided by 0.85 to arrive at a total, of which 15 percent is towards recreation, ceremonies and festivities. The prescribed provision of  25 percent to cover education, recreation, ceremonies, festivals and medical expenses has been moderated to 15 percent because expenses on educational and medical necessities are being separately provided for through relevant allowances and facilities and thus need not be provided here. This partially addresses the first of the two components outside the 15th ILC norms.

Step 5:   The cost estimated from Step 4 is increased by 25 percent to account for the skill factor, following the reasoning that there is no unskilled staff in the government after the merger of Group D staff in Group `C’. This addresses the second of the two components outside the 15th ILC norms.

Step 6:   The cost estimated from Step 5 is divided by 0.97 to arrive at a total, of which 3 percent provides for housing expenses. This is done in view of the observation that license fees for government accommodation is about 3 percent of the total pay. This addresses the fourth component stated under para 3 but partially so, as the 15th ILC norms had fixed the housing provision at 7.5 percent.

Step 7:   The cost estimated from Step 6 is as on 1 July, 2015 when the DA was 119 percent. The DA is assumed to be 125 percent as on 1 January, 2016, the day from which the Commission expects its recommendations to be implemented by the government. Accordingly the cost estimated from Step 6 has been increased by 3 percent (2.25/2.19 = 1.027 or nearly 3%).

The cost estimated from Step 7 is next rounded off to Rs.18,000, which is the minimum pay being recommended by the Commission, operative from 01.01.2016. This is 2.57 times the minimum pay of Rs.7,000 fixed by the government while implementing the VI CPC’s recommendations from 01.01.2006. Accordingly, basic pay at any level on 01.01.2016 (pay in the pay band + grade pay) would need to be multiplied by 2.57 to fix the pay of an employee in the new pay structure. Of this multiple, 2.25 provides for merging of basic pay with DA, assumed at 125 percent on 01.01.2016, while the balance is the real increase being recommended by the Commission. The real increase works out to 14.2 percent (2.57÷2.25 = 1.1429). The following table shows the real increase given by each CPC/Government over the previously set minimum pay:

(in percent)

II CPC	14.2
III CPC	20.6
IV CPC	27.6
V CPC	31.0
VI CPC	54.0
VII CPC	14.3

The real pay in government is protected by providing Dearness Allowance (DA), which is  that  percentage  of  pay  by  which  the  CPI  (IW)   increases  over  a  fixed  base  value.

Consequently the absolute amount of DA keeps on growing with every point increase in CPI (IW). On the other hand the real value of the industrial minimum wage is protected by providing Variable Dearness Allowance (VDA), which is a fixed amount of money given per point increase in CPI (IW) as notified by the Chief Labour Commissioner (central sphere) from time to time. Consequently, over a period of time, the minimum pay + DA in government becomes larger than the minimum wage + VDA in the private sector even though the basic minimum wage in both the sectors is calculated on the basis of the 15th  ILC norms. As on 01.01.2015 the minimum pay in government was Rs.14,910 whereas minimum wage for a skilled worker was in the range of Rs.9,000–Rs.11,000 per month.

Besides DA, government provides house rent, transport, location and function specific allowances besides Leave Travel Allowance (LTA) which, along with the basic pay, constitute the gross pay of a government employee. If one were to only take HRA at 30 percent of the basic pay and transport allowance at Rs.400+DA, as are admissible in A1/A class cities, together with educational allowances for two children at the rate of Rs.1,500 per month, the gross pay further increases to Rs.20,870 (20870 = 14910 +2100+860+3000) as on 01.01.2015. In addition government gives a host of other benefits that can be measured under the CTG (Cost to Government of an employee) concept. From these numbers it is clear that benefits given to the lowest ranked government employees, whether monetized or not, are significantly higher than the minimum basic pay and also much higher than the emoluments of skilled industrial workers.
On comparison with the private sector emoluments of a Govt General Helper, who is the lowest ranked employee in the government is Rs.22,579, more than two times the emoluments of a General Helper in the private sector organizations surveyed at Rs.8,000-Rs.9,500.

After considering all relevant factors the Commission is of the view that the minimum pay in government recommended at Rs.18,000 per month, w.e.f. 01.01.2016, is fair and reasonable and one which, along with other allowances and facilities, would ensure a decent standard of living for the lowest ranked employee in the Central Government.

Annexure to Chapter 4.2

Calculation of Minimum Pay as on 01.01.2016 by the Commission
		Per dayPCU	Unit	Per month3 PCU	Unit	Price/ Unit (Rs.)	Expenses(Rs.)
1.	Rice/Wheat	475	gm	42.75	kg	25.93	1108.30
2.	Dal (Toor/Urad/Moong)	80	gm	7.20	kg	97.84	704.44
3.	Raw Vegetables	100	gm	9.00	kg	58.48	526.28
4.	Green Vegetables	125	gm	11.25	kg	38.12	428.85
5.	Other Vegetables	75	gm	6.75	kg	32.80	221.42
6.	Fruits	120	gm	10.80	kg	64.16	692.93
7.	Milk	200	ml	18.00	litre	37.74	679.26
8.	Sugar/Jaggery	56	gm	5.04	kg	37.40	188.48
9.	Edible Oil	40	gm	3.60	kg	114.02	410.46
10.	Fish			2.50	kg	268.38	670.95
11.	Meat			5.00	kg	400.90	2004.51
12.	Egg			90.00	no.	4.27	383.98
13.	Detergents etc			Rs./month		291.31	291.31
14.	Clothing			5.50	meter	164.88	906.83
15.	Total (1-14)						9217.99
16.	Fuel, Electricity, Water Charges						2304.50
17.	Total-(15) divided by 0.8						11522.49
18.	Marriage, Recreation, Festivals, etc.						2033.38
19.	Total-(17) divided by 0.85						13555.87
20.	Provide for Skill by adding 25% to (19)						3388.97
21.	Sum (19+20)						16944.84
22.	Housing @						524.07
23.	Total-Divide no.21 by 0.97						17468.91
24.	Step up of 3% on No.23 as DA is projected at 125% on 01.01.2016						524.07
25.	Final Minimum Pay as on 01.01.2016 (23+24)						17992.98
26.	Rounding off						18000

Source: gconnect.in

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MACP scheme for Defence Service personnel – No marked change in 7th CPC Report

MACP scheme for Defence Service personnel – No marked change in 7th CPC Report

Assured Career Progression
The Services have sought four financial upgradations under MACP scheme at 6, 12, 18 and 24 years of service or on completion of six years of continuous service in same Grade Pay. It has been stated that 60 percent of the soldiers (i.e., Sepoys and Naiks) are deprived of the third financial upgradation on account of an early retirement.


Analysis and Recommendations : The Commission has considered the demand and notes that as it is the existing scheme of MACP for the Defence forces personnel, at 8, 16 and 24 years of service, is more beneficial than the one on the civilian side, which is spaced at 10, 20 and 30 years. The aspect of early retirement of the defence services personnel is therefore already factored in. Further, no revision in the MACP scheme is intended on the Civilian side.

Keeping these facts in view the Commission is unable to recommend any changes to the MACP scheme insofar as Defence Service personnel are concerned.

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