5 Percent DA July 2019 Hike Order

No. 1/3/2019-E- II (B)
Government of India
Ministry of Finance
Department of Expenditure

North Block, New Delhi
Dated the 14th October, 2019.

OFFICE MEMORANDUM

Subject: Grant of Dearness Allowance to Central Government employees- Revised Rates effective from 1.7.2019.

The undersigned is directed to refer to this Ministry’s Office Memorandum No, 1.11/2019-E II (B) dated 27th February, 2019 on the subject mentioned above and to say that the President is pleased to decide that the Dearness Allowance payable to Central Government employees shall be enhanced from the existing rate of 12% to 17% of the basic pay with effect from 1st July, 2019.

2. The term ‘basic pay’ in the revised pay structure means the pay drawn in the prescribed Level in the Pay Matrix as per 7th CPC recommendations accepted by the Government, but does not include any other type of pay like special pay, etc.

3. The Dearness Allowance will continue to be a distinct element of remuneration and will not be treated as pay within the ambit of FR 9(21).

Also check: Cabinet approves 5% additional DA/DR to Central Government employees due July, 2019

4. The payment on account of Dearness Allowance involving fractions of 50 paise and above may be rounded to the next higher rupee and the fractions of less than 50 paise may be ignored.

5. These orders shall also apply to the civilian employees paid from the Defence Services Estimates and the expenditure will be chargeable to the relevant head of the Defence Services Estimates. In respect of Armed Forces personnel and Railway employees, separate orders will be issued by the Ministry of Defence and Ministry of ( Railways, respectively.

6. In so far as the employees working in the Indian Audit and Accounts Department are concerned, these orders are issued with the concurrence of the Comptroller and Auditor General of India.

(Nirmala Dev)
Deputy Secretary to the Government of India

Download 5 Percent DA July 2019 Hike Order

The post 5 Percent DA July 2019 Hike Order – Grant of Dearness Allowance to Central Government employees appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

Order says remaining core concerns are being addressed separately

After a wait of about eight months, military personnel are likely to receive their revised pay recommended by the Seventh Pay Commission with arrears in May’s salary, say the general instructions issued by the three Services to their personnel.

The Union Cabinet issued orders last week for implementing the recommendations for military personnel. Following this, the three Services issued the general instructions stating the various recommendations that were approved.

“Army pay rules 2017 issued on May 03. Some core concerns have been addressed and remaining core concerns are being addressed separately,” said the instructions issued by the Army’s Pay Commission Cell on May 5.

Pay stages stretched

The recommendations approved include extension of pay stages for junior commissioned officers (JCO) and other ranks from 24 to 40 to prevent stagnation, increase in index of rationalisation for Colonels and Lieutenant-Colonels from 2.57 to 2.67 and extension of pay stages for Brigadiers by two.

On the pension front, two recommendations approved are restoration of the percentage-based disability pension and an additional option for pension by pay fixation method in addition to the consolidation method, whichever is higher.

“Revised pay with arrears likely to be credited this month,” the instruction stated.

Arrears since Jan, 2016

Sources said the arrears will be calculated from January 2016, the date of implementation of the pay panel recommendations, and will be credited with this month’s salary along with the revised pay. “They will deduct the 10% interim arrears given before Deepavali last year,” a source added.

The Controller-General of Defence Accounts (CGDA), which is responsible for implementing the recommendations, has already been issued instructions. “They will now calculate the revised tables and release them,” the source said.
Anomalies remain

However, some of the core anomalies raised by the services are yet to be addressed, top among them are Non-Functional Upgrade (NFU) and higher Military Service Pay (MSP) for JCOs.

NFU entitles all officers of a batch who are not promoted to draw the salary and grade pay that the senior-most officer of their batch would get after a certain period.

In a reference to that the instructions notes: Pay comparison between defence services, all India services and Group A services must be understood in totality and explained to rank and file to dispel apprehensions about discrepancies.

Source:  The Hindu

The post 7th CPC Defence Personnel Pay Hike from May, 2017 appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

New Delhi: With widespread resentment against the “meagre” pay hike implemented in the 7th Pay Commission and not get the the higher allowances, central government employees are annoyed with PM Modi government.

They are annoyed at little pay hike without allowances.

The Prime Minister Narendra modi government has fixed the minimum pay at a meagre Rs 18,000 in the 7th Pay Commission. In the last Pay Commission, the basic pay was Rs 7,000. The government multiplied it by 2.57 (fitment formula) and came to Rs 18,000. The employees unions are demanding 3.68 fitment formula.

The major contention is on the minimum pay, which unions are demanding to be Rs 26,000.

The employees unions had a meeting with a group of ministers, including the Home Minister Rajnath Singh, Finance Minister Arun Jaitley and Railway Minister Suresh Prabhu on the evening of June 30, 2016. The ministers said it will be considered and would be referred to High Level Committee.

The ministers assured the employees unions of hiking minimum pay but the government now decided not to appoint High Level Committee to examine the 7th Pay Commission recommendations in respect of minimum pay.

“The government will not clear any proposal on hike in minimum Pay including others pay related matter under the 7th Pay Commission recommendations because the cabinet had already passed it. Hence cabinet only will take higher allowances which was not given nod by it”, the top Finance Ministry sources told The Sen Times.

The government had set up the committee on allowances headed by Finance Secretary to examine the recommendations of 7th Pay Commission on allowances other than dearness allowance for cabinet nod in July, 2016 as the pay commission had recommended abolition of 51 allowances and subsuming 37 others out of 196 allowances. The committee on allowances was given four months by the government to complete its task.

The government gave the extension of the term of the committee on allowances up to February 22, 2017 in November.

However, the committee on allowances head Finance Secretary Ashok Lavasa said in October, 2016, “We are ready to submit our report, when the Finance Minister Arun Jaitley calls up.”

The government gave the extension on the pretext of demonetisation for getting normalized the position of the cash crunch.

Now, the government said that the higher allowances may be announced in March after the completion of five states assemblies poll process as the model code of conduct has come into effect from January 4 and the implementation is to come in April after nine to ten months of getting basic pay hike of the central government employees.

The sources told us that the government had no plan to give allowances in arrears from August.

So, the 7th pay commission recommendations gave an agonizing pain for the central government employees.

TST

The post Central government employees annoyed with Modi government about 7th Pay Commission pay hike appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

New Delhi: The government had in January 2016 had set up the high-powered panel to process the recommendations of the 7th Pay Commission which will have bearing on the remuneration of nearly 50 lakh central government employees and 58 lakh pensioners.

The Union Cabinet on June 29 cleared the recommendations of the 7th Pay Commission headed by AK Mathur in respect of the hike in basic pay and pension. However, the decision on 7th Pay Commission suggestions relating to allowances had been referred to a Committee headed by the Finance Secretary.

The Committee will complete its work in a time bound manner and submit its reports within a period of 4 months. Till a final decision, all existing allowances will continue to be paid at the existing rates.

The 7th Pay Commission examined a total of 196 existing allowances and, by way of rationalization, recommended abolition of 51 allowances and subsuming of 37 allowances. Given the significant changes in the existing provisions for allowances which may have wide ranging implications, the Cabinet decided to constitute a Committee headed by Finance Secretary for further examination of the recommendations of 7th CPC on allowances.

On 29 June 2016, Government accepted the recommendation of 7th Pay Commission Report with meager increase in salary of 14 percent after six month of intense evaluation and successive discussions. The Finance Minister of India claimed it historical increase of salaries due to little knowledge of Sixth Pay Commission.

The new scales of pay provide for entry-level basic are now up from Rs 7,000 per month to Rs 18,000, while at the highest level i.e. Secretary, it would go up from Rs 90,000 to Rs 2.5 lakh. For Class 1 officers, the starting salary will be Rs 56,100.

The recommendations will benefit over 1 crore employees. This includes over 47 lakh central government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from the defence forces.

Here are the Key Highlights

• Gratuity ceiling doubled to Rs 20 lakh
• Housing loan allowance hiked from Rs 7.5 lakh to Rs 25 lakh
• Minimum pension increased from Rs 3,500 to Rs 9,000
• 7th Pay Commission recommendations to be implemented within 6 months from due date
• Existing rates of monthly contribution towards Group Insurance to continue
• Total annual burden of pay, pensions and arrears of 7th Pay Commission recommendations: Rs 1, 02,100 crore
• 7th Pay Commission recommendations on allowances to be referred to a Committee headed by Secretary
• Based on minimum pay, fitment factor of 2.57 approved for revising pay of all employees uniformly across all level
• Minimum pay fixed at Rs 18,000 per month; maximum pay at Rs 2.25 lakh
  The Cabinet approval will benefit nearly 50 lakh central government employees and 58 lakh pensioners
• Pay hike to be implemented from January 1, 2016
• Budgetary allocation

While the Budget for 2016-17 fiscal did not provide an explicit provision for implementation of the 7th Pay Commission, the government had said the once-in-a-decade pay hike for government employees has been built in as interim allocation for different ministries. Around Rs 70,000 crore has been provisioned for it.
Source: zeenews

The post Bonanza for Central government employees: 7th Pay Commission recommendations rolled out appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

Press Information Bureau
Government of India
Ministry of Personnel, Public Grievances & Pensions

23-November, 2016

Pay Hike

The 7th Central Pay Commission in its Report contained in Para 5.1.46 titled ‘Withholding Annual Increments of Non-performers after 20 Years has inter-alia recommended for withholding of annual increments in the case of those employees who are not able to meet the benchmark either for Modified Assured Career Progression (MACP) or a regular promotion within the first 20 years of their service. The Government of India vide Resolution No.1-2/2016-IC dated 25.7.2016 has accepted this recommendation.

This was stated by the the Union Minister of State (Independent Charge) Development of North-Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances & Pensions, Atomic Energy and Space, Dr Jitendra Singh in written reply to a question by Shri Ram Charitra Nishad in the Lok Sabha today.

PIB

The post 7th Central Pay Commission Pay Hike appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

New Delhi: Finance Minister Arun Jaitley told lawmakers on Friday that he would need more money in the current fiscal year to cover the cost of 7th Pay Commission Pay hike for 10 million central government employees and pensioners.

The government will require “some enhancement” for spending on salaries and pensions in 2016-17 to absorb the off-cycle pay hikes announced in June on the recommendation of the 7th Pay Commission.

The government faces a challenge to achieve its fiscal deficit target of 3.5 percent of GDP in the current fiscal year, but is “quite optimistic” of fully achieving the target of 3 percent in 2017/18, the finance ministry said in the Medium-Term Expenditure report tabled in parliament’s lower house.

Rating agencies such as Moody’s have said that the increase in wages would boost consumer demand, leading to inflationary pressures and making it difficult for the next governor of the Reserve Bank of India to achieve its inflation target.

Prime Minister Narendra Modi’s government has just confirmed a central inflation target of 4 percent, plus or minus 2 percentage points, that was agreed with departing governor Raghuram Rajan for the next five years.

Total federal spending on salaries and pensions is estimated to rise about 10 percent in the next fiscal year to 2.58 trillion rupees ($38.6 billion) compared with budget estimates for the current fiscal year.

Reuters

The post 7th Pay Commission Pay hike needed more money: FM appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

New Delhi: Central government employees will decide on Wednesday whether to go on strike on July 11, in view of the government’s recent talks with the National Joint Council of Action (NJCA) on what they call a “meagre” pay hike.

The National Joint Council of Action , which represents 33 lakh Central government employees of Railways, Defence, Postal, Income Tax, Audit, Customs and Central Excise as well as other central government departments.

The Centre has fixed a minimum pay of Rs 18,000 in the pay hike approved by the Cabinet earlier this week. However, the central government employees are protesting the decision calling it a meagre rise in view of the price rise.

“Government has initiated talks with NJCA. We welcome it. But the decision regarding going on strike will be taken at the meeting of the council on July 6,” Convener of NJCA Shiv Gopal Mishra told PTI.

On June 30, the representatives of NJCA including Mishra were called for a meeting with Finance Minister Arun Jaitley, Home Minister Rajnath Singh, Railways Minister Suresh Prabhu and Minister of State for Railways Manoj Sinha.

“They have not assured us anything. They have proposed to refer the issue of minimum wage and fitment formula to a committee for reconsideration. The panel is expected to give its report in three to four months,” Mishra said.

Speculations were rife that the NJCA may defer the July 11 indefinite strike after government heeded to their demand of increasing minimum pay to over Rs 25,000 from Rs 18,000 fixed after considering the recommendations of the 7th Pay Commission.

Under the fitment formula, the government multiplied the minimum wage of Rs 7,000 fixed in the last pay commission with 2.57 and arrived at a minimum pay of Rs 18,000 per month.

The employees are demanding for the fitment formula of 3.68, which will result in minimum monthly pay of Rs 25,760.

Inputs with PTI

The post 7th Pay Commission: Central govt employees to take call on July 11 strike on Wednesday appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

7th Pay Commission Pay hike – Financial Express ideas for effectively utilising the additional payout in provisioning for Emergency fund creation, financial goals, asset allocation, long term and short term investments etc.
7th Pay Commission: While you wait for the payout, FeMoney advises you to give a hard look at your entire finances and then decide on how you want to go about spending the money.

If you are a central government employee, you must be eagerly awaiting the notification of the 7th Pay Commission, which might come close after the declaration of the state election results on May 19. The payout could be substantial with salary hike and arrears adding up to a Rs 1.02 lakh crore impact on government finances.

The 7th Pay Commission recommendation, which are to come into effect from January 1, 2016, will enlarge the pay package of 47 lakh central government employees and 53 lakh pensioners. The Commission has recommended a 23.55 per cent hike in pay and allowance. While pay will go up by 16 per cent, increase in allowance will be 63 per cent and increase in pension 24 per cent.

The huge payout by the government has already made the Reserve Bank of India worried over the its impact on inflation. In its recent credit policy, the central bank said that it expect inflation to go up by 1-1.5 per cent on account of the increased money in hand of central government employees.

So if you are one of the beneficiaries of the 7th Pay Commission, what should you do with the bonanza that is expected to come soon? As is natural with such one-time windfall coming your way, there would be that temptation of splurge, plan for an expensive holiday or buy that new car that you have been eyeing for some time.

However, while you wait for the payout, FeMoney advises you to give a hard look at your entire finances and then decide on how you want to go about spending the money.

Financial advisor, Sanjeev Govila, CEO, Hum Fauji Initiative, believes one of the priorities should be to create an emergency fund out of the arrears that one gets in lump-sum. In his five-point advise to Central Government employees Govilla says one should keep finanical keep financial goals and proper asset allocation in mind while dealing with the money. “It is absolutely essential that the bulk money which one gets as 7th Pay Commission arrears should go for meeting financial goals. And that is where the asset allocation and risk attitude should flow from,” Govila told FeMoney.

Here are Govila’s 5-point suggestions on dealing with the 7th PayCommission bonanza:

Emergency fund creation: Creation of emergency fund out of the payout is the prime requirement. Even before looking at life’s goals one has to be prepared for unforeseen events. Most of us remain oblivious to this and do not plan for it. This results in costly loans, embarrassing borrowings from friends and relatives or emptying long-term coffers. As a thumb-rule, about six month’s expenses should set aside for an emergency fund. The question is where to keep it? It could ideally be in multiple small bank fixed deposits or liquid mutual funds.

Cater to life’s financial goals: Life’s goals can be divided into critical goals and lifestyle goals. Critical goals are those which have to be met at all costs, like children education and marriage, retirement and medical expenses, while the lifestyle goals, like changing your car, vacations, leisure and passion activities.

Proper asset allocation: Spreading investment across various assets to minimise risks should be considered the final frontier of life’s financial planning. Whatever wealth creation or destruction takes place finally, is generally due to correct or incorrect asset allocation. An asset allocation directly results as a delicate balance between your future money requirements, indicating the type of investment avenues you should invest in, and your risk attitude and risk taking capacity.

Decide between long-term and short term: As a general rule, equity is for long-term and debt for the short term, with real estate and gold figuring somewhere in between. Investment in real estate and gold should depend on the future outlook of both these asset classes as prices of these physical assets are dependent on their seasonal cycles.

Assesment of risk-taking ability: Risk-taking is erroneously tagged to age, even by many financial planners. However, it is both an attitude and the capacity to take risks, the latter being dictated more by your current financial well-being. Hence, it is always better to go in for a risk-profiling rather than guessing the same by ‘indications’ of behaviour.

Source: Financial Express

The post 7th Pay Commission Pay hike – Financial Express ideas appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

In the heyday of Indian socialism, the perception of government was benign. In today’s climate of liberalisation, the government is viewed with hostility. That must explain the negative reaction both in the media and amongst the public at large to the increases in pay for Central government employees recommended by the Seventh Pay Commission (SPC).

The pay hikes are modest — embarrassingly so in comparison with pay increases and bonuses in the private sector. Yet, media reports talk of a ‘bonanza for babus’. The impact on the fiscal can be easily digested by the Indian economy. Yet, analysts warn of slippages in the fiscal deficit, a possible boost to inflation, and a setback to public investment. Do we want to run the government — which comprises not just civil servants but the police, armed forces, nurses, doctors, regulators and academics — at all? Or have we persuaded ourselves that all of the government is simply money down the drain?

Setting pay in government

The SPC’s figures don’t come out of nowhere. The Commission has a rigorous basis for setting pay in government. It arrives at a figure for minimum pay in government with reference to norms laid down by the 15th Indian Labour Conference (ILC) in 1957. The ILC had said that the minimum wage should cover the basic needs of a worker and his family, that is, a spouse, and two children who are below the age of 14. The SPC has spelt out the norms it has used for determining basic needs. It has gone by food requirements specified by a well-known nutritionist. To this are added provisions for clothing, fuel and lighting, education, recreation, festivities, medical expenses, and housing. There is an addition of 25 per cent to the total of the above to provide for the skill factor (the basic needs having been determined for an unskilled person). The SPC report provides detailed computations for each of these items. No reasonable person can accuse the SPC of being overgenerous.
Based on these norms, the SPC arrives at a minimum wage of Rs. 18,000 for a government employee. This is 2.57 times the minimum pay in the Sixth Pay Commission. The increase over the projected pay on the current basis as of January 1, 2016 is 14.3 per cent. This is the second lowest increase recommended by any Pay Commission since the first one, and it is way below the 54 per cent increase following the last one. The multiplication factor of 2.57 is used to arrive at pay for all levels of government except for a few at the top where a slightly higher multiple is used.

As before, pay at the lower levels of government is higher than in the private sector; at the top, the position is reversed. In today’s context, this may not be a bad thing at all. Pay in the private sector today is contributing towards massive inequalities in Indian society. Having a very different structure in government is a useful corrective to trends in the private sector. It will help contain tensions created by rising inequality.

Good news

So far as the impact on government finances is concerned, the SPC numbers provide a stream of good news. First, the impact of the pay hike on the Central government (including the railways) will amount to 0.65 per cent of GDP. This is less than the impact of 0.77 per cent of GDP on account of the Sixth Pay Commission.

Second, the impact on the Central government (excluding Railways), which is what matters when it comes to the Union budget, is 0.46 per cent of GDP. As some of the increase in salary comes back to the government as taxes, the impact, net of taxes, will be even less — say, 0.4 per cent of GDP (assuming an average tax rate of around 20 per cent on government pay). This is a strictly one-off impact. The correct way to view it, therefore, would be to amortise it over a period of, say, five years. The annual impact then is 0.08 per cent of GDP. The impact on the fiscal at the central level is barely noticeable.

Trends in the wage burden in the government are worth noting. Pay and allowances in the Central government have remained stable since 2010-11 at around 1.8-2.0 per cent of GDP. Thus, pay and allowances have been rising at roughly the same level as nominal GDP or 11-12 per cent. This is the increase after taking into account increments, adjustments for dearness allowance and promotions. In the private sector, such an increase would be considered laughable at all but the lowest level.

Pay, allowances and pension (PAP) as a proportion of government expenditure has been declining sharply. In 1998-99, PAP was 38 per cent of revenue expenditure. The SPC estimates that this figure has fallen to 18 per cent in 2015-16. (It will go up to 22 per cent in 2017-17 consequent to the SPC award, but will decline thereafter, as pay grows at a lower rate than government expenditure). The implication is striking: in financial terms, the workforce in government has been effectively downsized by nearly half over the past 17 years.

Pay in the private sector is contributing towards massive inequalities in society. Having a different structure in government will help contain tensions created by this inequality

Even in terms of numbers, India’s central bureaucracy (including the Railways but excluding the armed forces) has neither been increasing in recent years nor hugely bloated in absolute terms. The number of employees grew to a peak of 41.76 lakh in 1994. It has declined since to 38.9 lakh in 2014. Of the total, 13.8 lakh is accounted for by security-related entities (police and defence civilians). Railways and Post, which perform commercial functions, account for 15 lakh personnel. There are other commercial departments as well, such as Communications. Excluding security and commercial functions, the total central employment is just 4.18 lakh. “The ‘core’ of the government…”, the SPC report notes, “is actually very small…”

The SPC substantiates its point by comparing India’s Central government workforce with that of the federal government workforce in the U.S. In 2012, the non-postal civilian workforce in the U.S. was 21.3 lakh. In India, the corresponding figure in 2014 was 17.96 lakh. The number of personnel per lakh of population in India was 139 in 2014, way below the figure of 668 for the U.S. India’s bureaucracy needs not so much downsizing as right-sizing — we need more doctors, engineers, IT specialists, tax experts, judges, and so on.

The government is not bound by the SPC’s recommendations. It can opt for higher pay hikes as happened with the previous Pay Commission. Assuming the government goes along with the SPC, what impact on growth can we expect? Increased pay for government employees means greater government expenditure and hence a fiscal stimulus — provided government expenditure on other counts is not reduced and the fiscal deficit rises. This happened at the time of the Sixth Pay Commission. Higher wages for government employees contributed to a higher fiscal deficit and helped stimulate growth in the short run.

This time round, the Finance Ministry insists that it will stick to its fiscal deficit target for 2016-17 after providing for the SPC pay hike. If it does so, the reduction in fiscal deficit will be contractionary. Hence, the pay hike will not lead to economic expansion in the aggregate. However, greater income in the hands of government employees could favourably impact sectors such as the real estate, automobiles and consumer goods.

Source: TheHindu

The post Why we must not grudge them a pay hike appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.