7th CPC: Cabinet approves recommendations of the 7th CPC on allowances


Cabinet approves recommendations of the 7th CPC on allowances 
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi approved the recommendations of the 7th CPC on allowances with some modifications. The revised rates of the allowances shall come into effect
from 1st July, 2017 and shall affect more than 48 lakh central
government employees.

 
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi approved
the recommendations of the 7th CPC on allowances with some
modifications. The revised rates of the allowances shall come into effect
from 1st July, 2017 and shall affect more than 48 lakh central
government employees. 
While approving the recommendations of the 7th CPC on 29 th June, 2016, the Cabinet had decided to set up the Committee
on Allowances (CoA) in view of substantial changes in the existing
provisions and a number of representations received. The modifications are
based on suggestions made by the CoA in its Report submitted to Finance
Minister on 27th April, 2017 and the Empowered Committee of
Secretaries set up to screen the recommendations of 7th CPC. 
7th CPC recommendations on Allowances
 
The 7th CPC had adopted a three-pronged approach in examining a
total of 197 allowances which involved an assessment of the need for
continuation of each allowance, appropriateness of the set of people
covered by the allowance and rationalisation which involved clubbing of
allowances with similar objectives. Based on the examination on these
lines, the 7th CPC recommended that 53 allowances be abolished
and 37 be subsumed in an existing or a newly proposed allowance. 
For most of the allowances that were retained, the 7th CPC
recommended a raise commensurate with inflation as reflected in the rates
of Dearness Allowance (DA). Accordingly, fully DA-indexed allowances such
as Transport Allowance were not given any raise. Allowances not indexed to
DA were raised by a factor of 2.25 and the partially indexed ones by a
factor of 1.5. The quantum of allowances paid as a percentage of pay was
rationalised by a factor of 0.8. 
A new paradigm has been evolved to administer the allowances linked to risk
and hardship. The myriad allowances, their categories and sub–categories
pertaining to civilians employees, CAPF and defence personnel have been
fitted into a table called the Risk and Hardship Matrix (R&H Matrix).
The Matrix has nine cells denoting varying degrees of risk and hardship
with one extra cell at the top named as RH – Max to include Siachen
Allowance. Multiple rates applicable to individual allowances will be
replaced by two slab rates for every cell of the R&H Matrix. 
Modifications approved by the Cabinet
 
The modifications approved today were finalised by the E-CoS based on the
recommendations of the CoA. The CoA had undertaken extensive stakeholder
consultations before finalising its recommendations. It had interacted with
Joint Consultative Machinery (Staff side) and representatives from various
staff associations. Most of the modifications are on account of continuing
requirement of some of the existing arrangements, administrative exigencies
and to further the rationalization of the allowances structure. 
Financial Implications
 
The modifications approved by the Government in the recommendations of the
7th CPC on allowances will lead to a modest increase of Rs.1448.23 crore per
annum over the projections made by the 7th CPC. The 7th CPC, in its Report,
had projected the additional financial implication on allowances at Rs.29,300
crore per annum. The combined additional financial implication on account
of the 7th CPC recommendations along with the modifications approved by the
Cabinet is estimated at Rs.30748.23 crore per annum.

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Conclusion

While increasing the rate of allowances affecting the central government
employees, especially the Defence, CAPF and Coast Guard personnel, the
staff of Railways, Postal department and nursing staff, the total number of
allowances have been rationalized from 197 to 128. Thus, the Government has
shown a great deal of fiscal prudence and at the same time addressed the
genuine concerns of the employees and responded to some of the
administrative exigencies necessitating the modifications. 

Source: PIB

 

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