Implementation Date of 7th CPC Allowances – Minister Replied in Parliament on 18.7.2017
“There is no proposal for revision of the date of implementation of recommendation on allowances”
Government of India
Ministry of Finance
Department Of Expenditure
UNSTARRED QUESTION NO.257
TO BE ANSWERED ON TUESDAY, THE 18TH JULY, 2017
ASHADHA 27, 1939 (SAKA)
IMPLEMENTATION OF RECOMMENDATIONS OF SEVENTH CPC
257 SHRI NEERAJ SHEKHAR:
Will the Minister of FINANCE be pleased to satate:
(a) whether Government has implemented the recommendations of Seventh CPC regarding allowances w.e.f. 1 July, 2017 instead of 1 January, 2016;
(b) if so, the reasons and rationale therefor;
(c) the reasons for denying allowances from 1st January 2016 or from the date of announcement for implementation of enhanced basic pay under 7th CPC and arrears thereof;
(d) whether Government will review it and implement enhanced allowances w.e.f. 1 January, 2016;
(e) if so, the details thereof; and
(f) if not, the reasons therefor along with the reasons for lowest hike in Pay Commission since last 70 years?
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI ARJUN RAM MEGHWAL)
(a) to (c): As per the established practice relating to implementation of earlier Central Pay Commission’s recommendations on allowances, the recommendations of the Seventh Central Pay Commission (7th CPC) on allowances have been implemented prospectively with effect from 01.07.2017.
In view of significant departure from the existing provisions relating to allowances as recommended by the 7th CPC and representations received in this regard, recommendations of the 7th CPC on allowances were referred to a Committee by the Government. After taking into account the recommendations of the Committee on Allowances which submitted its Report on 27.04.2017, the recommendations were approved by the Government on 28.06.2017.
(d) to (f): There is no proposal for revision of the date of implementation of recommendation on allowances. The hike is based on the recommendation of the 7th CPC on allowances, which is commensurate with the rise in Dearness Allowance as has been mentioned by the 7th CPC at Para 8.2.5 (4) of its Report.
Source: Rajya Sabha
7th CPC At Para 8.2.5(4) Of Its Report
7th CPC Report on Allowances – Para 8.2.5 (4)
4. For most of the allowances that have been retained, we have sought to provide a raise that is commensurate with the rise in DA. Accordingly, allowances that are in the nature of a fixed amount but not DA indexed have generally been raised by a factor of 2.25.
Allowances that are in the nature of a fixed amount but are partially indexed to DA have generally been raised by a factor of 1.5. Allowances that are in the nature of a fixed amount but fully indexed to DA have not been given any raise. Regarding percentage based allowances, having regard to the increase in the pay structure (and consequently the Basic Pay) as a result of the recommendations of this Commission, and keeping in mind the raise granted to slab-based allowances, the quantum of percentage based allowances has been rationalized by a factor of 0.8.
17.23 Allowances: The entire structure of allowances have been examined de novo with the overall aim of transparency, simplification and rationalization, keeping amongst other things, the proposed pay structure in mind. The Commission has recommended abolishing 52 allowances altogether. Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances. Particular emphasis has been placed on simplifying the process of claiming allowances. Allowances relating to Risk and Hardship will be governed by the proposed Risk and Hardship Matrix. (para 8.2.5) .
17.30 Any allowance, not mentioned here (and hence not reported to the Commission), shall cease to exist immediately. In case there is any demand or requirement for continuation of an existing allowance which has not been deliberated upon or covered in this report, it should be re-notified by the ministry concerned after obtaining due approval of Ministry of Finance and should be put in the public domain. (para 8.2.5)
Source: 7th CPC Report