Monday, September 1, 2008
Disparities in 6th Pay Commission has left armed forces unhappy
New Delhi, Sept. 2, 2008: The disparities in 6th Pay Commission has left officials in armed forces very unhappy. It is not just junior level officers who have been voicing discontent over the anomalies and disparities between civilian and armed forces pay package, even top echelon of armed forces has come forward to voice concern regarding the anomalies.
There are news that armed forces bosses are so much worried over the disparities that there is talk as to whether armed forces should accept implementation of new pay package for armed forces officers.
The bosses in armed forces are worried that disparities between them and their counterparts in the bureaucracy and paramilitary forces will discourage young people from joining the armed forces including army, navy and air force.
Reacting to the government's notification of the new pay packages Monday, sources said the Chief of Staffs Committee had taken the matter seriously and apprised defence minister A.K. Antony about the disparities.
Officers in armed forces are concerned over the raw deal given to Lt-Colonels and their equivalent ranks in IAF (Wing Commander) and Navy (Commander). They are the mainstay of the fighting forces and a small mistreatment can make them feel neglected.
Earlier Air Chief Marshal Fali H. Major in a letter addressed to Chairman of the Chiefs of Staff Committee and the Indian Navy chief had said, “The finance ministry is introducing yet another anomaly by lowering the extant of parities of officers of the armed forces, of the Lt. Col. (and equivalent), by retaining them in pay band-3, while raising similarly placed civilian and paramilitary officers to pay band-4”.
IAF chief had said that “It is reliably learnt that civilian and paramilitary officers in the extant pay scales S-24 (Rs.14,300-400-18,300) and S-25 (Rs.15,100-400-18,300) will be placed in pay band-4, whereas the same is being denied to the armed forces officers (Lt. Col. and equivalent) who were already in S-25”.
Former armed forces chief General (Rtd) NC Vij had criticized the original Sixth pay recommendations calling it inadequate. In a letter written to Prime Minister Dr Manmohan Sigh he had said, “ As a former chief, I feel morally duty-bound to bring this fact to the notice of the Hon'ble Prime Minister in my personal capacity. I take heart from the fact, that it is under your leadership, that, in my tenure, the government went for a major improvement in the 'operational posture by sanctioning South Western Command and 9 Corps HQs with full complements and also for some restoration of self esteem of the young officers through addressing their delayed promotions-cum-service conditions, by approving Part 1 of Ajay Vikram Singh Committee report'…If this had been followed up, through a balanced PCR and implementation of Part II of the 'AVS Report', things would have reasonably improved, but unfortunately the very opposite has happened.”
Stressing on the plight of army personnel he further said, “Sir, you yourself hail from a state, which has traditionally produced soldiers. You would have often wondered, as to why a supremely fit jawan/JCO who retires at the young age of 42-48, ages and grows old so fast. It is because he has no resources to fall back upon to ensure a decent living for his family after his early retirement. This problem gets further accentuated with the constraints of even poor farming conditions. Why should a soldier retire at this early age (other services serve upto 60 years) and why this man who has served the Nation so valiantly not be given a second career by way of 'lateral transfer', which alas will never come about”.
Reports say that out of total 54,770 officers in the armed forces, almost 19,000 are Lt-Cols. These include 11,187 in the Army, 4,216 in IAF and 3,528 in Navy.
Courtesy: www.khabrein.info
6th Pay Commission: Pay scale for armed forces below officer rank
Army
| Existing Pay Scales | |||
| Rank | Group X | Group Y | Group Z |
| Sepoy | 3600-70-4650 | 3250-70-4300 | 3050-55-3875 |
| Naik | 3700-85-4975 | 3425-85-4700 | 3150-70-4200 |
| Havaldar | 4150-100-5650 | 3600-100-5100 | 3250-85-4525 |
| Nb Sub | 5770-140-8290 | 5620-140-8140 | 5200-125-7450 |
| Subedar | 6750-190-9790 | 6600-170-9320 | 6170-155-8650 |
| Sub. Maj. | 7250-200-10050 | 6750-200-9550 | 6600-200-9400 |
Air Force
| Existing Pay Scales | |||
| Rank | Group X | Group Y | Group Z |
| AC | 3675 | 3250 | 3050 |
| LAC | 4025-60-4925 | 3650-60-4550 | 3080-60-3980 |
| CPL | 4150-70-5200 | 3900-70-4950 | 3200-70-4250 |
| SGT | 5000-100-6500 | 4320-85-5595 | 3775-85-5050 |
| JWO | 5770-140-8290 | 5620-140-8140 | 5200-125-7450 |
| WO | 6750-190-9790 | 6600-170-9320 | 6170-155-8650 |
| MWO | 7400-200-10200 | 6750-200-9550 | 6600-200-9400 |
Navy:
| Existing Pay Scales | |||
| Rank | Group X | Group Y | Group Z |
| App/Seaman II | 3200-60-3260 | 3325-60-3445 | 3050-55-3215 |
| Art V/Seaman I | 4150-70-4360 | 3650-60-4550 | 3080-60-3980 |
| Art IV/ Ldg Seaman | 4550-100-6350 | 3900-70-4950 | 3200-70-4250 |
| Art III-I/PO | 5120-100-7120 | 4320-85-5595 | 3775-85-5050 |
| Chief Art/CPO | 6000-125-8250 | 5620-140-8140 | 5200-125-7450 |
| MCPO II | 6750-190-9790 | 6600-170-9320 | 6170-155-8650 |
| MCPO I | 7400-200-10200 | 6750-200-9550 | 6600-200-9400 |
For more details Pls visit: www.khabrein.info
6th Pay Commission proposals to result in CRR hikes: PNB
However, KC Chakrabarty, CMD, Punjab National Bank, believes that if the Sixth Pay Commission�s recommendations are implemented there may be some more liquidity in the market, which would result in further CRR hikes. He also sees some repo rate hikes but does not see banks increasing interest rates immediately.
Excerpts from CNBC-TV18�s exclusive interview with KC Chakrabarty:
Q: What could we expect from RBI at the next meet, could we see any pullback in the stance that they have had so far?
A: I don�t think anything will happen. It is too early. If the recommendations of the Sixth Pay Commission are implemented, it will result in more liquidity being infused into the market. So, there maybe further CRR hikes to rein in this liquidity, but I don�t think rates are going to be eased off so early.
Q: Do you expect repo rates to go up from here because a lot of market participants feel there could be another 50 bps tightening of the repo rate?
A: It may happen, but this would not result in banks raising their interest rates. Banks have already factored in a repo rate hike. They need not go in for another interest rate hike for at least another 5-6 months. If there is a 25-50 bps repo rate hike, banks may not increase their lending rates immediately, but there may be a hike in deposit rates so as to encourage people to save in this difficult market.
Q: If deposit rates go up some more, do you expect some squeezing of net interest margins if you are not inclined to pass down those rates?
A: A 50 bps increase in CRR or a 25 bps hike in the repo rate will not affect margins by more than 10-15 basis points. We will be able to achieve our targeted net income growth despite the pressure. Banks may not unnecessarily tamper with interest rates at this juncture. However, if the CRR increases by another 100 bps, then we may have to rethink.
Q: There are some reports which suggest that the demand for housing sector has scaled back quite significantly. What kind of credit growth do you think banks can maintain? Will it get closer to the RBI�s target of 20% or will it remain above the 25% mark?
A: Credit growth has to come down. If banks are unable to achieve 20% credit growth, RBI should take Monetary measures to bring it down to that level. Credit growth should stabilize at around 20-21%. It may be little more than 20%, but it cannot be more than 25%.
Q: The bond market has moved quite interestingly. The bond yield went up to 9.5% and now the benchmark yield is down to 8.7%. What is that signalling and where do you think yields are headed?
A: I don�t think 8.7% on bond yields is sustainable with this interest rate structure. When bond yields had gone up to 9.5%, many investors built up their bond portfolio believing it was a good rate for the next 10-15 years. However, credit demand in the pipeline was a bit more and people therefore tried selling out. That is why this has happened.
Bond yields will stabilize around 9%. A correction in bond yields is not possible unless inflation comes down. (Courtesy: Moneycontrol.com)
Central Pay Panel: allowances, Perks, Arrears and pay bands etc
Union Government notified Sixth Pay Commission Friday. Following are some key points after notification.
Government has accepted most of the points but has rejected three recommendations and has put some other contentious issues to be taken up in future.
Pay Band and Grade pay:
* Grade Pay up to PB2 recommended by 6CPC accepted as such.
* Revised Grade pay from PB3 and above. Check New pay band and Grade Pay
* The basic pay drawn as on 1.1.2006 on the existing Fifth CPC pay scales will be multiplied by a factor of 1.86 and then rounded off to next multiple of 10. This will be the pay in the revised running Pay Band. Grade Pay, as approved by the Government, corresponding to the pre-revised pay scale, will then be added to the Pay in the revised Pay Band. The total of pay in the Pay Band and grade pay will be the revised Basic Pay as on 1.1.2006.
* Rate of annual increments will be 3% and the rate of variable increment for high achievers in PB-3 will be 4%.
* There will be a uniform date of annual increment, viz. 1st July of every year. Employees completing 6 months and above in the revised pay structure as on 1st of July will be eligible to be granted the increment. The first increment after fixation of pay on 1.1.2006 in the revised pay structure will be granted on 1.7.2006 for those employees for whom the date of next increment was between 1st July, 2006 to 1st Jan 2007.
DA and other Allowances
* AICPI (IW) with base 2001 may, henceforth, be used for the purpose of calculating DA till it gets revised. The base using the 2001 series works out to be 115.76. Based on this index the revised DA as on Jan-06, July-06, Jan-07, July-07, Jan-08 and July-08 are estimated to be 0%, 3%, 6%, 9%, 12%, and 16% respectively (based on the calculation made as per index - Exact DA rates are yet to be confirmed by the Government).
* “Campus” restriction for grant of Transport Allowance will be removed. Consequently, employees living in campuses will also be eligible for Transport Allowance. Further, Transport Allowance for the employees at the lowest levels will be increased to Rs.600 (from Rs.400) in A-1/A class cities and Rs.400 (from Rs.300) in other towns.
* New TA - Employees drawing grade pay of Rs. 5400 and above will be eligible to receive TA of Rs.3200 and DA thereon (A1/A class cites) and Rs.1600 and DA thereon (other places. Similarly Employees drawing grade pay of Rs.4200 to Rs.4800 will be eligible to receive TA of Rs. Rs.1600 and DA thereon (A1/A class cites) and Rs.800 and DA thereon (other places). Employees drawing grade pay of below Rs. 4200 will be eligible to receive TA of Rs. 600 and DA thereon (A1/A class cites) and Rs.400 and DA thereon (other places).
* City Compensatory Allowance abolished.
* Employess living in X (Earlier classified as A-1), Y (Earlier classified as A, B-1 & B-2), and Z (Earlier classified as C and Unclassified) will be eligible for HRA of 30%, 20% and 10% (on Fixed Pay and Grade Pay) respectively.
* Children Education Allowance and Reimbursement of Tuition Fee are merged and reimbursement of Children Education allowance will be paid upto the maximum of Rs.1000 per child per month subject to a maximum of 2 children. Hostel subsidy will be reimbursed upto the maximum limit of Rs.3000 per month per child. The limits would be automatically raised by 25% every time the Dearness Allowance on the revised pay bands goes up by 50%.
* Cycle Allowance, Washing Allowance, Cash Handling Allowance, Special Allowance, Night Duty Allowance and Split Duty Allowance have been doubled. Similarly, rates of allowances specific to different Ministries/Departments/Organisations not covered in this Report will also be doubled. The rates of these allowances will be increased by 25% every time the Dearness Allowance payable on revised pay scales goes up by 50%.
* All provisions concerning travel under LTC are to be retained except frequency of travel in home town concession (up to three times during the first two blocks of 4 years after joining the service).
* The revised allowances, other than dearness allowance, will be effective from 1st day of September, 2008.
ACP (Assured Career Progression):
* Three upgradations will be granted under Assured Career Progression (ACP) Scheme at 10, 20 and 30 years as per the modified ACP Scheme recommended by the Commission. ACP Scheme will also be applicable to Group A employees.
* Financial upgradation through ACP will be available whenever a person has spent 10 years continuously in the same grade.
* Benefit of pay fixation available at the time of normal promotion shall be allowed at the time of financial upgradations under the scheme. Thus, an increase of 3% of pay and grade pay shall be available as financial upgradation under the scheme.
Other Points accepted by the Government:
* The Commission’s recommendation regarding payment of arrears has been modified to the extent that the arrears will be paid in cash in two instalments – first instalment of 40% during the current financial year (2008-09) and the remaining 60% in the next financial year (2009-10).
* The Government has approved setting up of Anomalies Committees to examine individual, post-specific and cadre-specific anomalies. The Anomalies Committees should endeavour to complete their work in one year.
Recommendations not accepted by the Government in Sixth Pay Commission:
* Liberal ‘severance package’ for those employees who want to leave service without pension with more than 15, but less than 20 years of service.
* Recommendation relating to Holiday Policy that there should only be three closed holidays for Government employees.
* Flexi-hours for women employees and flexi-weeks for employees with disabilities.
Recommendations of Sixth CPC which will be examined separately :
* Recommendation related to Bonus and Over Time Allowance.
* Recommendation related to General Provident Fund for Central Government employees and Central Government Employees Group Insurance Scheme.
* Introduction of Health Insurance Scheme for Central Government employees and pensioners.
Friday, August 29, 2008
Sixth Pay Commission: Notification issued
New Delhi, Aug 30, 2008: Finally the government today issued notification for implementing Sixth Pay Commission recommendations.
The day was being awaited with bated breath by more than five million central government employees. The Union cabinet had approved the recommendations of the sixth pay panel suggestions on 14 August and had made several improvement over the original suggestions made by the central pay panel.
The notification means that the central government employees are all set to receive the revised pay as approved by the government from September 1, giving a much needed relief to central government employees who like others have been hit hard by increasing inflation and spiraling prices.
The implementation of the pay panel recommendations would require huge amount of money that experts say would increase the deficit. The financial implications in 2008-09 on account of the implementation of the recommendations of the Sixth Central Pay Commission as modified by the Cabinet will be around Rs.15700 crore on the Central Budget and Rs.6400 crore on the Railway Budget
It is being said that modification of the Pay Commission award will cost the exchequer an additional Rs 5,000 crore towards annual wages and Rs 6,000 crore towards arrears, said Expenditure Secretary Sushma Nath.
The notification issued by the government today says, “With regard to fixation of pay in the revised pay bands, the basic pay drawn as on 1.1.2006 on the existing fifth CPC pay scales will be multiplied by a factor of 1.86 and then rounded off to next multiple of 10. this will be the pay in the revised running pay band. Grade pay as approved by the corresponding to the pre-revised pay scale will then be added to the pay in the revised pay band. The total of pay in the pay band and grade pay will be the revised basic pay as on 1.1.2006.
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