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.

 

Population criteria classification Rate as a % of pay + Grade

Pay + MSP +NPA

50 lakhs and above X 30%
50 to 5 lakhs Y 20%
Below 5 lakhs Z 10%

 

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

 

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:

Grade Pay Daily Allowance
 

 

Rs.9000 and above

Reimbursement for Hotel accommodation of upto Rs.5000 per day ; reimbursement of A/c taxi charges of upto 50 Kms. for travel within  the  city  and  reimbursement of  food  bills  not  exceeding  Rs.500 per day
 

 

Rs.6600 to Rs.8400

Reimbursement for Hotel accommodation of upto Rs.3000 per day ; reimbursement of non-A/c taxi charges of upto 50 Kms. Per diem for travel within the city and reimbursement of food bills not exceeding Rs.300 per day
 

 

Rs.5400 to Rs.6500

Reimbursement for Hotel accommodation of upto Rs.1500 per day ; reimbursement of taxi charges of upto Rs. 150 per diem for travel within  the  city  and  reimbursement of  food  bills  not  exceeding  Rs.200 per day
 

 

Rs.4200 to 4800

Reimbursement for Hotel accommodation  of upto  Rs.500  per day ; reimbursement of taxi charges of upto Rs. 100 per diem for travel
Grade Pay Daily Allowance
 

 

Rs.9000 and above

Reimbursement for Hotel accommodation of upto Rs.5000 per day ; reimbursement of A/c taxi charges of upto 50 Kms. for travel within  the  city  and  reimbursement of  food  bills  not  exceeding  Rs.500 per day
 

 

Rs.6600 to Rs.8400

Reimbursement for Hotel accommodation of upto Rs.3000 per day ; reimbursement of non-A/c taxi charges of upto 50 Kms. Per diem for travel within the city and reimbursement of food bills not exceeding Rs.300 per day
 

 

Rs.5400 to Rs.6500

Reimbursement for Hotel accommodation of upto Rs.1500 per day ; reimbursement of taxi charges of upto Rs. 150 per diem for travel within  the  city  and  reimbursement of  food  bills  not  exceeding  Rs.200 per day
 

 

Rs.4200 to 4800

Reimbursement for Hotel accommodation  of upto  Rs.500  per day ; reimbursement of taxi charges of upto Rs. 100 per diem for travel
  within  the  city  and  reimbursement of  food  bills  not  exceeding  Rs.150 per day
 

 

Below Rs.4200

Reimbursement for Hotel accommodation  of upto  Rs.300  per day ; reimbursement of taxi charges of upto Rs. 50 per diem for travel within  the  city  and  reimbursement of  food  bills  not  exceeding  Rs.100 per day

We have proposed Time Scale of Pay Structure in our Memorandum in replacement of Pay  Band  and  Grade  Pay.   In view  of  the  same,  we    propose  that  all persons  belonging  to Executive Class may be extended I class by air/ AC First Class by train and all non executive Y class by Air/AC II tier class by train.

This scheme of reimbursement  of charges has led to persons indulging  in undesirable corrupt practices. Inflated hotel receipts, food bills etc., have been presented by many including highly placed officials.   We think providing a composite rate of daily allowance to take care of accommodation internal travel charges and food bill would be a proper.  We, therefore propose these rates may be as under:-

Category A1 and A class city Other cities
Executives Rs.5000/-per day +DA Rs.3500/- per day + DA
Non- Executives Rs.4000/-per day +DA Rs.2500/- per day + DA

Travelling Allowance on Transfer

Class By Train/Steamer Rate  per  Km  for  transport by Road
Executive Class 6000 Kgs by goods train

/           14           wheeler wagon/1single container.

Rs.50  +DA  (Re.1/-   per  Kg per Km)
Non Executive Class 3000 Kgs Rs.50  +DA  (Re.1/-   per  Kg per Km)

We agree that composite Transfer Grant equal to one month Pay + DA alongwith actual fare for self  and family  as per  the  entitled  class  may  continue.  As regards  transportation  charges  of personal effects we propose the following:-

Class By Train/Steamer Rate  per  Km  for  transport by Road
Executive Class 6000 Kgs by goods train

/           14           wheeler wagon/1single container.

Rs.50  +DA  (Re.1/-   per  Kg per Km)
Non Executive Class 3000 Kgs Rs.50  +DA  (Re.1/-   per  Kg per Km)

Children Education Allowance

The Children Education allowance was introduced w.e.f. 1-9-2008 on the basis of the recommendation of 6th CPC.  In the background of escalation of school fees, and other expenses connected  with  education  of  Children,  the  present  scheme  has  been  a  big  relief  for  the Government employees. Presently the allowance is admissible for two children, for studying in a recognised school upto XII standard. The maximum ceiling is stipulated at Rs.18000/- since this allowance had been hiked by 50% because of the DA component in salary having been crossed

100% on 1.1.2014.  We suggest  doubling  of this allowance  and increasing  the same  by 50 %

whenever the DA reaches  50%.

The  insistence  of  receipt  for  each  and  every  expense  to  claim  the  allowance  is  a cumbersome procedure, which serves no purpose at all.   In order to avoid a probable misuse, the  employee  may  be  asked  to  produce  an  affidavit  to  the  effect  the  child/children  were bonafide student of the school.   . In the case of hostel subsidy also,   the procedure is irksome and  serves  no  purpose  at all  except  that  the  concerned  employee  could  be  harassed.    The insistence of receipt etc. in that case also be dispensed with.   In both the cases,   a certificate from the concerned  school authorities that the child is either a bona fide  student or an inmate in the hostel must be treated as sufficient to grant the allowance.

We also suggest that the scheme may be extended to cover any two children studying for Graduate/Post Graduate and Professional courses. This suggestion is being made in view of the huge expenses  involved  for the children’s  higher studies, especially  in the background  of the Government   withdrawing   itself   from   the   higher   education   sector   and   allowing   private institutions to come up and extract exorbitant charges for various courses.  We also suggest the CEA to continue if the children are in Educational institution even after the retirement of the employee till the course is completed.

Education Advance:  Presently   the  employees   are  to  depend  upon  the  Banks  for education loans. Banks levy interest on these loans very heavily. If the child is not able to get an employment immediately after his studies, it become an unbearable burden on the  employee. We, therefore, suggest that the 7th CPC may recommend to the Government for the sanction of Education  Advances    with  an  interest  rate  not  exceeding  5%  for  those  employees,  whose children take up higher studies.

We request our suggestion in the matter may be recommended to the Government for its acceptance.

Overtime allowance.

Overtime   Allowance   is  seldom   granted   to  the  Government   employees.   Only  in  case  of emergency  and  in  the  contingency  in  which  the  work  cannot  be  postponed,  the  over  time allowance is entitled to.

The third, Fourth, Fifth and Sixth Central  Pay Commissions  had recommended  for the discontinuance  of Over Time Allowance  except in the case of Industrial  employees,  Staff Car drivers, and operational staff. However the Government continued to pay over time allowance calculated on the basis of notional pay in the pre-revised basic pay of IV Central Pay Commission

The matter was referred to the  Board of Arbitration in C. A. Reference No. 2 of 2004 on 06.09.2005,  The  award  was  given    in  favour  of  the  employees  to  the  effect  that  overtime allowance shall be calculated on the basis of actual pay in the Fifth CPC revised Pay scales. This award has not  been implemented so far. The result is that Rs 15.85 per hour which is 10 times lesser than the  rate fixed in Railways and Defence is being paid in Postal and other Departments.

We propose that over time allowance should  continue to the paid and calculated on the basis of actual pay, DA and Transport Allowance from time to time. The rate of overtime Allowance should be refixed as and when the DA is increased and there shall be no ceiling on amount  of overtime  allowance  which become payable.   Overtime  allowance  is denied to the personnel  on  the  plea  that  their  pay  is  beyond  the  stipulated  level  for  grant  of  overtime allowance.   If that be the case, they must not be asked to work beyond the stipulated working hours.  However, we are aware that such a stipulation cannot be made in the case of operational organisations.   We, therefore, suggest that the overtime allowance must be granted   to all personnel,   if he/she is asked to work beyond working hours, irrespective of limitation of emoluments.

Night duty allowance.

The Nigh Duty Allowance as granted now is very meagre and require revision. It is pertinent to mention  that  considering   the  changes  in  the  payment  of  Dearness  Allowance  and  price escalation, the Ministry of Railways has revised the allowance from Rs. 57.90 to Rs. 203.20.

Though  the  V  CPC  recommended  that  the  relaxation  of  the  ceiling  for  Night  Duty allowance be restricted to certain   categories of Railways, the Board of Arbitration has given a categorical award that the ceiling of Rs. 2200 (with reference to IV CPC) may be lifted in all cases.

. We therefore request this Commission to do away with ceiling of Pay for all .

The Govt. had not revised the rate of Night Duty Allowance on the basis of revised pay both while implementing the recommendations  of the IV, V, VI Pay Commissions. The Board of Arbitration has also given award that NDA should be calculated on the basis of current rates of pay including DA & CCA.

We therefore, urge upon the VII CPC  to recommend that rates of NDA for all should be computed  on  the  basis  of  revised  pay  recommended  by  VI  CPC  and  it  should  be  reviewed annually in order to include the DA Admissible.

Patient care/ hospital care allowance.

Patient/hospital care allowance is presently granted as a lumpsum amount.  This is an allowance, which is hiked by 25% as and when the DA entitlement crosses over 50%.  We suggest that the lump sum amount may be doubled and the rates made uniform in respect of all employees of all Central Government hospitals and Dispensaries. Presently Night duty allowance is denied when the Patient care allowance is granted.  In other words, the two allowances are not concurrently granted.  This is an unjust stipulation in as much as Night Duty allowance is granted when one is asked to perform duty during night. The stipulation may, therefore, be removed.     We request that our suggestion in this matter may be accepted and recommended.

Also Check following Proposals of Confederation in its Memorandum submitted to 7th Pay Commission

Download Detailed Memorandum Submitted by Confederation to 7th CPC in July 2014

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