Govt orders payment of 7th Pay Commission scales to military

, by indianmilitaryveterans

Soldiers, sailors and airmen of the three defence services will hereafter be paid salaries recommended by the 7th Central Pay Commission (7CPC).

The new scales will be paid with effect from January 1, 2016. In June 2016, the Cabinet had approved 7CPC scales for civilian employees with effect from January 1, 2016, resulting in additional financial outgo of Rs 84,933 crore. However, the three service chiefs had requested that payment be made to defence personnel only after an Anomalies Committee resolved the military’s representations against the 7CPC recommendations. While the military’s three key requests have not been addressed in this award, Defence Minister Arun Jaitley revealed two significant concessions in a press briefing in New Delhi on Wednesday.

First, disability pension for soldiers would henceforth be paid at the same scales as civilians. The generals had protested the 7CPC order that disability pensions be paid to the military at a flat slab rate, rather than as a percentage of salary. This had sharply reduced the disability pensions almost across the board. “The Cabinet also approved the retention of percentage-based regime of disability pension implemented post 6th CPC, which the 7th CPC had recommended to be replaced by a slab-based system”, said a government notification.

This would involve an additional outgo of Rs 130 crore per annum. Second, a modified method of calculation will increase the pension of servicemen who retired before 2016, benefiting over 55 lakh pensioners. This involves an additional payout of Rs 5,031 crore for 2016-17, which would increase this year’s pension allocation of Rs 85,740 crore. Even so, there is disappointment within the three services that the award has not addressed three key “anomalies”, which had been strongly endorsed by the three service chiefs.

The first of these relates to errors of logic and arithmetical calculations in fixing the pay scales of various ranks in the military. Second, while “military service pay” (MSP) was fixed at Rs 15,500 per month for officers and Rs 5,200 per month for “junior commissioned officers” (JCOs) and other ranks (ORs), the military pointed out that JCOs, who are Group “B” employees, should receive a higher MSP than ORs, who are Group “C” employees. The third military request involved the grant of “non functional upgradation” (NFU), which involves the automatic upgrade of salary scales for all persons, regardless of whether they were selected for promotion to higher grades, in tandem with those who were selected for promotion, with a lag of two years.

This benefit is granted to all other central government employees. Jaitley clarified that the first two issues are being addressed by the Anomalies Committee, while the NFU issue is before the Supreme Court. The government has appealed to the apex court after the Armed Forces Tribunal ordered the payment of NFU to military personnel. Pending the implementation of the 7CPC award to military personnel, the government had granted an interim salary hike of 10 per cent to all services personnel across the board. Since the average salary hike proposed by the 7CPC amounts to approximately 15 per cent, the new orders will marginally raise the payout of salaries and pensions, and arrears.



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Clarifications and update on the Cabinet decisions on pay and pensionary issues emanating out of the 7th Central Pay Commission

, by indianmilitaryveterans

There is a press note floating around on social media regarding certain decisions taken by the Cabinet related to pay and pensionary modalities related to the 7th Central Pay Commission (CPC).

Though many have questioned its veracity, this is to confirm that it is absolutely a valid document and has been officially issued by the Ministry of Finance. That said, let me run through some of the important decisions taken by the Cabinet, clarifications thereon and their impact. Please note that the new Pay Rules issued by the Ministry of Defence do not take into account the changes in the pay structure or removal of anomalies and these shall be incorporated through separate amendments in the rules issued on 03 May 2017.
Restoration of Percentage based Disability Pension Rates The 7th CPC had recommended ‘flat/slab’ rates of disability pension for the defence services rather than the ones based upon ‘percentage of pay’. Civil disabled personnel were however retained on the percentage system as before. As stated earlier, frankly, I never expected this regressive 7th CPC recommendation to be accepted by the Government, but unfortunately it was.

While recommending this aspect, the 7th CPC had also made unfounded and uncharitable remarks against disabled soldiers by casting aspersions on those who have incurred disabilities while in service which was discussed in detail by me earlier in my opeds, here and here. This resulted in a massive decrease after the 7th CPC resulting in a payout even lower than 6th CPC rates for almost all post-2016 retirees of all ranks and also for pre-2016 retirees of certain ranks.
The arbitrariness of this decision becomes evident from the following chart at the apex levels: (100% Disability) Rank Rates under the 6th CPC as on 31 Dec 2015 Rates applicable after the 7th CPC as on 01 Jan 2016
Lt Gen Rs 52,560 Rs 27,000
Head of Central Armed Police Force Rs 52,560 Rs 67,500

Thankfully, the then Defence Minister, Mr Manohar Parrikar, fully understood the issue and took personal interest in getting the issue referred to an Anomaly Committee. The Defence Services HQ as well as the Ministry, and even civilian employee organisations, supported the resolution of this anomaly which now stands addressed and the Cabinet has decided to retain the old system of calculation on percentage basis, that is, 30% of pay shall remain the disability element for 100% disability.
I however do hope that a protection clause is introduced for pre-2016 retirees of lower ranks who stood to gain from the slab rates. Improvement in Pension calculation system for pre-2016 civil and defence retirees The Cabinet has also accepted an improvement over and above the system of pension calculation which was finally effectuated after the 7th CPC.

Rather than basing the pensionary calculations on the “Old Pension X 2.57” formula, an option would be provided to calculate the pension based upon the notional pay stage from which the employee had retired as opposed to the minimum of pay as was the system followed till the 6th CPC. Calculation of pension in this manner would definitely enhance the pension of civil pensioners and perhaps a small number of defence pensioners, who, in all probability would be provided the opportunity of choosing the most beneficial option, that is, the new formula, 2.57 multiplication formula or OROP rates.

Contrary to popular perception, this does not exactly result in OROP for pre-2016 civil employees as is being projected, since while this is based on notional data, the military OROP is operated on live date of fresh retirees, moreover while this system is expected to be revised only after ten years, the military OROP as per the current scheme is meant to be revised after every five years. Issuance of Pay Rules rather than Instructions on Pay There were messages that the Chiefs of the Defence Services have been sidelined and downgraded since the earlier system of issuance of Special Army Instructions, Special Navy Instructions and Special Air Force Instructions (SAI/SNI/SAFI) has been discontinued and a new dispensation of ‘Pay Rules’ has been initiated.

This seems to be the negative imagination of fertile minds. SAI/SNI/SAFI were never issued under the authority of the Chiefs of the Defence Services HQ but were always issued by the Ministry of Defence, that is, the Government of India. ‘Orders’ such as Army Orders (AO) etc were (and are) issued by the Defence Services HQ under the power of the Chiefs. The new Pay Rules have been promulgated under the authority of Article 309 of the Constitution of India and are statutory in character rather than being mere executive instructions like was the case till now. With this, the pay rules of the Defence Services are at par with the statutory pay rules of the civil services which are also issued under the authority of Article 309 of the Constitution of India. Defence Pay Matrix to have 40 stages The 7th CPC had recommended only 24 stages in the defence matrix while 40 stages were provided to civilians. This anomaly has been rectified and now the defence pay matrix shall also have 40 stages. This will particularly be helpful for JCOs towards the retiring years and will also beneficially affect their pension and other retiral benefits. Multiplication factor of 2.67 This anomaly had been rectified earlier for Brigadiers and a multiplication factor of 2.67 had been applied for the said rank. Now the same benefit has also been extended to Lieutenant Colonels, Directors to Government of India and Colonels, that is, Levels 12A and 13 of the Pay Matrix. Other Anomalies There shall be pay protection for the amount of Military Service Pay (MSP) on promotion from the rank of Brigadier to Major General. It may be recalled that MSP is not entitled to ranks above the rank of Brigadier. No decision has been taken by the Government on the aspect of Non Functional Upgradation till now since the matter is being considered sub judice. On directions of the Supreme Court, the Government is re-considering the issue of NFU for Central Armed Police Forces for which a meeting was recently held. The issue is to be considered by the Government and the fresh decision is to be placed before the Supreme Court in August 2017. The most pertinent anomaly of enhancement of Military Service Pay, especially for JCOs, also remains pending along with other matters and probably these issues would be clearer after various anomaly committees submit their reports and a decision is taken thereafter by the Cabinet. Non-inclusion of 'X Group Pay' for pension is also a cause of concern, it may be recalled that till now the same was included as an element for pension. The committee on allowances has already submitted its report which will now be examined by the Government. Unlike pay and pension which are admissible retrospectively from 01 January 2016, most freshly rationalized allowances shall only be admissible prospectively. This is all I have to say at present, please DO NOT mail me individual queries on email or social media. You are free to discuss the above @ the comments section of this post. Thank You.


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