Revision of Allowances proposed by Confederation to 7th CPC

Revision of Allowances proposed by Confederation in the Memorandum submitted to 7th Pay Commission

Revision of Dearness Allowance, HRA, CCA, Transport Allowance, Deputation Allowance, TA, Daily Allowance, Children Education Allowance, Night Duty Allowance, OT, Patient Care Allowance proposed by Confederation

Dearness allowance.

The  neutralisation  envisaged  under  the  present  computation  of  dearness  compensation  is supposed to be cent per cent, but in reality it is not the case.   Actual consumer price index is much higher than the level at which DA is calculated on the basis of 12 monthly average.   The average is always lower than the actual cost of living.

The calculation  of consumer  price index, its basis, the basket of goods on which it is based,  are questionable and has become a matter of dispute.  Since the Pay Commission being not the forum at which these issues could be taken, we do not propose to go into the details of this aspects.

We suggest, therefore, that the existing formula of computation of DA and its payment with effect from 1st January, and 1st July, may continue.

House Rent allowance.

 

 

The present scheme of HRA is based on the recommendation of the 6th CPC, which is as follows:

We   reproduce   hereunder   the   recommendation   made   by   the   third   Central   Pay Commission in the matter of grant of house rent allowance. (Para 29 Part I. Vol. IV. Chapter 56), which would be the best if implemented even today.

“While  we find it difficult  to accept the kind of parity suggested  above, we are aware of the acute  problem  caused  by the  lack  of adequate  government  housing  and  by the  inadequate government  housing and by the inadequacy  of the existing rates of house rent allowance and recommend as follows:-

(i)           Government  should  take  houses  on long  lease  and make  residential  accommodation available to its employees on payment of 10% of their pay.

(ii)          Government should lay down appropriate house rent allowance rates in different cities and  towns  based  not  on  population  criteria,  but  on  an  actual  assessment  of  the prevailing  levels  of rent in different  cities  and towns.   Alternatively,  certain  notional rents  for  different   types  of  accommodation   meant  for  officers   and  personnel   of specified pay groups should be laid down for particular cities after studying the actual conditions  in that city.   The difference  between  the actual rent paid and 10% of pay should be reimbursed subject to a maximum of the difference between the notional rent and 10% of the pay.   The existing norms in regard to entitlement  of accommodation, size of rooms etc. could, if necessary,  be reduced  depending  on the housing  situation and the norms usually adopted by different income groups in renting accommodation in the various cities.   Such notional rents should, to start with, be applied to all stations falling under the description  of classified cities for purposes of House Rent Allowance, Additions  could  also  be  made  to the  list later  on by including  other  cities  deserving similar treatment.

(iii)         Till the Government  is able to make arrangements recommended  in the preceding sub-
paragraphs, the rates of HRA should be as follows:”

Class of city/town	Rate of HRA
A, B-1 and B-2	15% of pay subject  to a maximum  amount  of Rs.400 as house rent allowance.
C class	7 ½ % of pay subject to a maximum amount of Rs.200 as house rent allowance

The above said recommendation  is still to be acted upon by the Government and   the transitory provisions suggested by them i.e. payment of allowances at a pre-determined rate on the  basis  of classification  made  of  the cities  depending  upon  the  population  continue  to be employed. The non-implementation of the above recommendation of the third CPC , has without exception, gone to depress the wage of all sections of Central Government employees   as they are  perforce  to spend  more  than  what  they  receive  as HRA  for  obtaining  and  retaining  the accommodation

The  rates   prescribed   by  the  6th    CPC,  though   an  improvement   over   its predecessor Commission,  has not improved the situation.  The real estate value throughout the country  has  skyrocketed    and owning  an accommodation  within  the  city/Municipal  limit  has become impossible for Government employees.    There is not a single town/village where the real estate boom has remained unaffected. The phenomenal increase in the value of land has naturally impacted the rent,  one is to pay on leasing house/flat.

The house rent allowance does not bear even a small percentage of the rent.   The 7th CPC  may recommend to the Government to act upon the suggestion made by the 3rd CPC without any further delay. Pending action on the part  of  the  Government,  the  Commission  may  suggest  the  following  rates  of  House  Rent allowance;

X classified cities 60%

Y classified towns 40%

Z classified/unclassified  places  20%

Compensatory City allowance.

The  Compensatory City allowance has been granted to Central Government employees since the First Central Pay Commission.  This allowance was sanctioned to compensate for the high cost of living in bigger cities classified as such for grant of house rent allowance. Upto 3rd CPC it used to be certain percentage of pay for different pay ranges and different classified towns. The 4th and 5th CPC, however, recommended lump sum amounts as CCA.  5th CPC in para 106.10 (Pge 1582) of their report has commented that :

“We also do not support the demand for making CCA a percentage  of basic pay because this amounts to admitting a firm and casual relationship between CCA and income.”

When it is admitted that CCA is essentially an allowance given to offset the imperfection in  Dearness  allowance  as  a  measure  of  relative  expensiveness  of  classified  Cities,  it  really becomes an additional DA. When the DA is at a percentage of Pay, how can CCA not be fixed as a percentage of pay.  The basis on which the lumpsum amount of CCA was recommended by the 4th and 5th CPCs had also not been disclosed and therefore, it appears to be an arbitrary decision.

The 6th  CPC on the other hand recognised  that the only two factors viz. accommodation  and transportation  contribute  to high cost  of living  in classified  towns.   They,  recommended  the revised HRA  and  Transport allowance to adequately compensate for relative expensiveness of the classified cities.   In view of that contention,  they stated that the CCA stands subsumed in Transport  allowance.  We  are  unable  to  agree  with  the  idea  of subsuming  CCA  in Transport allowance as recommended by the 6th CPC on the consideration that the relative expensiveness in bigger cities is  only on account of problems of accommodation and transportation.

There are various  other factors  due to which  the expensiveness  of a particular  city either  increases  or decreases.   CCA was a component in determination of overtime allowance prior to the implementation  of  the  6th   CPC  recommendations.    By  allowing  this  to  be  subsumed  in  the transport allowance, it became difficult to factor the CCA component in the computation of over time  allowance.    We  further  demand  that  CCA  must  not  be  denied  where  employees  get special compensatory allowance.

For these reasons, we propose the Commission to recommend the following rates of City Compensatory allowance:

 

Pay  Range	X classified city	Y classified towns.
Pay upto Rs. 50,000	10% of pay	5% of pay
Pay of more than Rs. 50000	6%   of   pay   subj\ect   to   a minimum of Rs. 5000	3%   of   pay   subject   to   a minmum of Rs. 2500

As the relative  expensiveness  affects  middle  class  employees  more severely  we have provided higher rates of CCA for those in the pay range upto  Rs. 50,000.  We have not proposed grant of DA on this allowance.

Transport allowance.

The 5th  CPC had introduced transport allowance for employees working in classified towns on account of various factors like unprecedented growth of city limits, increase in volume of traffic and non availability  of residential  accommodation  at reasonable  rents near offices, which are usually located in the heart of cities.  If these were the factors, it appears that the 5th CPC did not take into account that it is usually  a low paid employees  who finds residence  at a very long distance from his office whereas  officers are offered residences  very near to their offices. If, therefore, transport allowance was meant to defray the transportation charges from residence to  office  and  back,    the  higher  rates  ought  to  have  been  recommended  for  the  low  paid employees who were residing at a distant places.

Since the 6th  CPC’s recommendation  in this regard was implemented, there had been several rounds of increase in the fuel charges making a cascading impact on the public transport fares.   Taking these factors into account, we suggest that the following rates of transport allowance may please be recommended, applicable for all Government employees uniformly.    There are several restrictions imposed for the grant of this allowance.  One of them stipulates that the Government employees must be at his headquarters for certain number of days in a month to enable him to draw this allowance.   There are organisations, where personnel   by force of circumstances have to be out of H.qrs. for months together.   To deny them the transport allowance is to say the least salting the wound.   These restrictions, we request the commission to recommend to the Government to be removed..

X classified city	Other places.
Rs. 7500 + DA	Rs. 3750 +DA

We also request that the Transport allowance at Faridabad, Gaziabad and Noida must be at Delhi rates. The condition stipulated  in Finance Ministry OM No. 19029/1/78-E-IV  (B) dated 31.8.1978  that if a physically  handicapped  employee  who  is eligible  for double  the rate of Transport Allowance goes on leave, he will be eligible for TA at ordinary rate only during the leave period may also be removed.

Deputation duty allowance.

In our memorandum submitted to the 6th Central Pay Commission, we had pleaded for doubling the  Deputation  (Duty)  allowance.  Our  plea  in  this  regard  was  not  accepted  by  the  6th  CPC. Presently the rate of the allowance is 5% when one is drafted for deputation in the same city and

10% if posted outside.    In quite a number of Departments of Government of India, there is need for  taking  personnel  on  deputation  to  ensure  that  certain  specialised  jobs  are  carried  out efficiently as it could not be undertaken by the in-house talent.

The personnel will volunteer for deputation  only when it is found to be financially  lucrative. The present rates are not so and quite a number of ex-cadre posts are reported to be lying vacant.    We, therefore, request that the 7th  CPC may recommend to double the rate of Deputation duty allowance i.e. 10% of pay when posted in the same station and 20% when posted outside.

Travelling Allowance and TA on transfer

The travel entitlement  while on tour or transfer as recommended  by the V CPC are as under

Pay Range	Travel Entitlements
For Post in the grade pay of Rs.9000 and above	J Class by air / AC First Class by train
For post carrying grade pay from Rs.6600- to Rs.8400	Y Class by air / AC First Class by train
For post carrying grade pay from Rs.5400- to Rs.6500	Y Class by air / AC II Tier Class  by train
For post carrying grade pay from Rs.4200- to Rs.4800	AC II Tier Class  by train
For  post  carrying  grade  pay  of  less  than Rs.4200	First  Class  /AC  III  Tier  /  AC  Chair  car  by train

Daily allowance.

The entitlement for accommodation, taxi charges and food bills  as recommended by the 6th CPC are  as under: