GOVERNMENT OF INDIA
MINISTRY OF  HEALTH AND FAMILY WELFARE
RAJYA SABHA
UNSTARRED QUESTION NO-4426
ANSWERED ON-11.04.2017

Financial impact of 7th CPC on medical institutes

4426 .    Shri K. R. Arjunan

Will the Minister of HEALTH AND FAMILY WELFARE be pleased to state:

(a) whether medical institutes are finding difficulty to comply with Governments circular to generate 30 per cent of additional financial impact incurred on implementing 7th Central Pay Commission (CPC);

(b) whether most of the medical institutes have said that it will not be possible to generate the 30 per cent of additional financial impact without burdening patients and for them Government hospitals are the last hope especially for the poorer section of our society;

(c) whether most institutions have now written to Government explaining the difficulty; and

(d) if so, details thereof and steps proposed to be taken up by Government thereon?
ANSWER

ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF HEALTH AND
FAMILY WELFARE
(SHRI FAGGAN SINGH KULASTE)

(a) to (d): Government has not put any mandatory condition on Medical Institutes to generate 30% of the additional financial impact incurred on implementing the 7th Central Pay Commission (CPC). Most Medical Institutes have expressed inability to meet 30% of the additional financial impact. Therefore, the Ministry has submitted 13 proposals so far to Ministry of Finance for relaxation in the condition to bear 30% of additional financial impact.

ENGLISH VERSION HINDI_VERSION

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CGDA, Ulan Batar Road, Palam, Delhi Cant-110010

No.AN/XlV/14164/7th CPC/corrsp/Vol-I

Dated 01/02/2017

To
All PCsDA/CsDA/PCof A(Fys)Kolkata

Subject: Clarification regarding pay fixation under 7th CPC for the post of ‘Trainee’ appointed on compassionate grounds.

This office is receiving several references frorn various controller offices seeking clarification regarding pay fixation under Seventh CPC in respect of ‘Trainee-appointed on ground without acquiring minimum educational qualification in the pay scale of Rs 4440/-7440/- (pre-revised ) without any Grade Pay. Such trainees are to be placed in the pay band-I (5200-20200) With Grade pay of Rs 1800/- only on acquiring the minimum qualification prescribed under the recruitment rules. However, under the CPC, neither any specific pay matrix level nor the manner for fixation of pay in respect of MTS Trainee has been prescribed.

2. In this regard, it is intimated that matter already stands referred to the Ministry for furnishing necessary clarification/guidelines to regulate the pay fixation of trainees under Seventh CPC. Reply of the same is still awaited. As and when , reply is received from the Ministry, the same will be widely publicized. Hence, it is requested to await for orders/ clarification from the Ministry in this regard.

3. This is for your information and necessary action please.

sd/-
(Kavitha Garg)
Sr.Dy.CGDA(AN)

Authority: http://cgda.nic.in/

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The Income Declaration Scheme, 2016 (the Scheme) provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets. The Scheme is open for declarations up to 30.9.2016.

As regards, concerns regarding confidentiality of the information filed under the Scheme, it is reiterated that information contained in a valid declaration is confidential and shall not be shared. In respect of declarations filed with the Commissioner of Income-tax, Centralised Processing Centre, Bengaluru [CIT (CPC)], the declaration shall not be shared even with the jurisdictional Principal Commissioner / Commissioner and payments made under the Scheme shall not be visible to the jurisdictional officers. Form-2 and Form-4 required to be issued in such cases shall be system generated by the CPC.

Similarly, the declaration filed with jurisdictional Principal Commissioner/Commissioner shall not be shared with any authority within or outside the department including the jurisdictional Assessing Officer. Further, the payments under the Scheme shall neither be reflected in 26AS statement nor can be viewed by the Assessing Officer in the Online Tax Accounting System (OLTAS) of the Department in the interest of confidentiality.

PIB

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No. AB-14017/11/2014-Est(RR)
Government of India
Ministry of Personnel, PG and Pensions
Department of Personnel & Training

New Delhi
Dated the 16th January, 2015

OFFICE MEMORANDUM

Subject:- Review of Model RRs for the Store Keeping staff category of posts.

The Model RRs for the Store Keeping staff category of posts issued in this Department OM No. AB-14017/41/87-Estt. (RR) dated 23.3.1987 have been reviewed in the light of 6% CPC recommendations on revision of pay scales, instructions issued by this Department, etc. Accordingly, the revised Model Recruitment Rules for the same are enclosed as Annexure to this Office Memorandum.

2. Ministries / Departments may review the existing recruitment rules and notify the revised rules conforming to the Model Recruitment Rules. These may also be forwarded to all autonomous/ statutory bodies for adoption. The Ministry of Home Affairs is also requested to forward these Model RRs to the UT Administrations for appropriate action.

3. Hindi version will follow,

(Mukta Goel)
Director (E-I)
Tel: 2309 2479

DOWNLOAD MODEL RECRUITMENT RULES FOR THE POST OF STORE KEEPER GRADE-II

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Dear Editor

The Central government has setup 7th Central Pay Commission for the reviewal & revision of Pay & Perks of its employees afresh. It has been observed that after 4th C.P.C the employees of most of the States demanded implementation of its recommendations in their favour. In J&K State, too, its recommendations were implemented in two phases in 1987 and 1992 though not fully. Similarly, 5th and 6th C.P.C’s recommendations too were implemented in a way that suited the then rulers in J&K State. Besides, the recommendations of CPCs do not accommodate the view point of employees organizations of States as such there has been a demand for implementation of CPCs recommendations as per Central pattern.
All J&K Low Paid Employees Federation headed by a veteran trade union leader Com. Abdul Majid Khan held the view the Pay structure should be based upon “Need based minimum wage” accepted in the 15th Indian Labour Conference held in 1957 chaired by the then Prime Minister of India Pt. Jawahar Lal Nehru and treating D.A as a deferred wage. This view has not been reflected in the recommendations of successive pay Commissions so far. With a view to restructure Pay & Perks on uniform basis there is thus justifiable need to convert 7th CPC into National Pay Commission so that state employees organizations too have an opportunity to represent their respective view point before it before the Pay commission formulate its recommendations.

—Krishan Singh,
A Pensioner of J&K State

Source: Kashmir Times

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GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
(RAILWAY BOARD)

No PC-V/2003/CC/25/SR

New Delhi, dated 19/03/2014.

The General Secretary
NFIR
3, Chelmsford Road.
New Delhi-110065

Sub:- Allotment of improved Pay Scale to Railway Accounts Staff w.e.f 1/1/1996 on actual basis.

The undersigned is directed to refer to NFIR’s letters No. NFIR/VI/CPC/Main/10/Pt IX dt 28.02.13, NFIR/VI/CPC/Main/10/Pt IX dt 9.5.13, NFIR/VI//CPC/Main/10/Pt.9 dt 13.8.13 and NFIR/VI/CPC/Main Pt.9 dt 5.11.13 on the above subject and to state that in context of another case involving identical issue the matter was under consideration in consultation with Central Agency Section/Department of Law and Justice, and based on opinion of Ld. Additional Solicitor General of India an SI.P has been filed in that matter before the Hon’ble Supreme Court. The said SLP is pending before Hon’ble Supreme Court. As such the matter at present is sub-judice.

Yours faithfully
Sd/-
For Secretary/Railway Board

Source: NFIR

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– by Raj Kumar Ray (Financial Express)

SUMMARY

Growth has fallen in the last couple of years eroding revenue while inflation remains stubbornly high. The new pay commission will have to factor in both concerns
Why does the government appoint a pay commission every decade?

A pay panel is appointed every decade to review and recommend the pay structure for central government employees taking into account various factors such as cost of living, inflation rate, revenue growth and fiscal deficit of the government, growth in workforce, private sector job scenario and wages, and economic growth. The government has so far appointed six pay commissions. The demand for a permanent pay commission set up through an Act of Parliament has been raised once but it was not accepted by the government.

Earlier this month, Prime Minister Manmohan Singh approved the constitution of the Seventh Pay Commission—to be headed by retired Supreme Court judge Ashok Kumar Mathur—to suggest the extent of hike in salaries of the 7-million-plus central government staff and pensioners with effect from 2016. Petroleum secretary Vivek Rae has been appointed as a full-time member, NIPFP director Rathin Roy will be part-time member and Meena Agarwal will be member-secretary of the new pay panel.

How did the process of pay hikes evolved?

The pay panel recommendations have evolved with time. The first central pay commission (CPC) adopted the concept of “living wage” to determine the pay structure of the government staff. The third CPC adopted the concept of “need-based wage”. The fourth CPC had recommended that the government constitute a permanent machinery to undertake periodical review of pay and allowances of its employees, but this was not accepted by the government. The sixth CPC suggested performance related incentive scheme (PRIS) to replace the ad hoc bonus and productivity-linked bonus schemes. The pay panel also suggested that the running pay band be extended to all grades of officers. Also, the sixth pay panel suggested slashing of the number of grades to 20 and one distinct pay scale for secretaries from the 35 existing earlier.

By how much have the public sector salaries increased every decade following the pay panels’ recommendations?

By and large, the salaries of central government staff have tripled every decade. The sixth CPC suggested 3 times increase in salaries from that of fifth CPC levels—it was 2.6 times for lower grade officials and slightly above 3 for higher grade staff. The increase in salary during fifth CPC was 3-3.5 times the fourth CPC levels.

What has been the fiscal implication of pay hikes?

Government finances have come under strain after implementations of each CPC. After the fourth CPC, the combined fiscal deficit of centre and states rose to 9.5% of GDP in FY87 from 7.7% in FY86. The impact was significantly harsh during the fifth CPC, especially for states—the combined fiscal deficit rose from 6.1% in FY97 to 7% in FY98 and then to 8.7% in FY99 with the aggregate deficit of states surging from 2.6% to over 4%.

In the case of the sixth CPC, the government expenditure increased by about Rs 22,000 crore during 2008-09—Rs 15,700 crore on the general budget and Rs 6,400 crore on the rail budget. The Rs 18,000 crore arrears were distributed in two years—40% in FY09 and 60% in FY10. The fiscal implication of sixth CPC coupled with fiscal stimulus in the form of higher spending and tax cuts after the Lehman crisis, increased Centre’s fiscal deficit to 6% in FY09 and 6.5% in FY10 from less than 3% in FY08.

What are the challenges before seventh CPC?

The new pay panel faces many challenges when it starts the process of reviewing the pay structures of babus. First, the economic growth has slowed sharply in the last 10 years—from over 9% between FY06 and FY08 to 4.5% in FY13. This means slower revenue growth and little room for scaling up expenditure on salaries.

Second, the Fiscal Responsibility and Budget Management (FRBM) target has already been revised more than twice after the Lehman crisis and the new target for lowering the fiscal deficit target to 3% of GDP is FY17. This again binds the government to restrict spending on salaries and wages.

Third and the most important factor, inflation has stayed high in the past few years—the CPI inflation (CPI-Industrial Workers and the new CPI) has averaged over 9% in the past eight years, which means cost of living has gone up significantly and hence necessitates higher compensation for workers. The dearness allowance of government staff has already touched 100%, which along with the rise in other allowances have more than doubled salaries since 2006.

Analysts expect the seventh pay panel to suggest 3-3.5 times hike in salaries across various grades from sixth CPC levels apart from a further rationalisation of government staff. Already, direct or permanent jobs in public sector have been shrinking while engagement of contract labour and outsourcing is on the rise. This trend is likely to continue given the fiscal imperatives of the government.

There is a perception that government salaries should rise faster at the higher grades and slowly at the lower grades to keep pace with private sector. It needs to be seen whether the seventh CPC retains the minimum:maximum ratio at sixth CPC level of 1:12. A hike in the ratio should not impinge the fisc much as the top level officials—joint secretaries and above—comprise less than 5% of the overall public sector workforce. The performance related incentives could also be reviewed to retain talent within the public sector. More than the fiscal implication, what matters is the productivity of the public sector. For instance, sluggish clearances needed for large projects have ruined investment and halved the growth rate in last three years. The silver-lining of the next CPC could be that it may boost the services sector growth and help revive the faltering economy from 2016 as higher salaries boost spending on housing, automobiles and consumer electronics.

Source: Challenges before the Seventh Pay Commission
[http://www.financialexpress.com/news/challenges-before-the-seventh-pay-commission/1226949/0]

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