Finance Ministry issued orders on upgradation of cities / towns on the basis of Census 2011 for the purpose of House Rent Allowance

Finance Ministry issued orders on upgradation of cities / towns on the basis of Census 2011 for the purpose of House Rent Allowance

The new and revised list of cities & towns has been declared by the Finance Ministry today for the purpose of House Rent Allowance on the basis of Census 2011.

House Rent Allowance to Central Government employees is now calculated on the basis of the population census of 2001. The cities and towns are classified as X, Y, and Z, based on their population. Employees in these towns are eligible for 30%, 20% and 10% House Rent Allowances respectively.

Population census is conducted once every ten years. The most recent census was held in 2011. Official information and findings of the Census was sent by the registrar General & Census Commissioner to the Finance Ministry a long time ago.

There is no denial in the fact that the Confederation of Central Government Employees has been constantly demanding this upgrading. The Confederation had, on 28.04.2014, sent a letter to the Finance Ministry. The letter said that even though the 2011 Census Report CD was received, there is no official announcement from the Government in this regard. The letter also demanded that a revised HRA and TA be implemented immediately in the reclassification of cities and towns on the basis of 2011 Census. On 30.07.2014, the Finance Ministry had, in reply to the mail, said that steps are being taken to implement the revised HRA and TA rates to the Central Government employees of these cities and towns.

Now, Finance Ministry issued orders on re-classification / upgradation of cities / towns on the basis of Census 2011 for the purpose of House Rent Allowance to Central Govt employees with effect from 1.4.2015.

G.I. Min. of Finance, Dept. of Exp. O.M.No.2/5/2014-E.II(B), dated 21.7.2015

Subject : Re-Classification / Upgradation of Cities / Towns on the basis of Census-2011 for the purpose of grant of House Rent Allowance (HRA) to Central Government employees.

Reference is invited to this Department’s O.M. No.2(13)/2008-E.II(B) dated 29.08.2008 relating to grant of House Rent Allowance (HRA) to Central Government employees on the recommendations of the 6th Central Pay Commission (CPC) whereby a list of cities / towns classified as “X”, “Y” and “Z” for the purpose of grant of HRA was enclosed as Annexure. The matter relating to re-classification of cities / towns on the basis of Census-2011 for the purpose of grant of HRA to Central Government employees has been considered by the Government.

2. The President is pleased to decide that in supersession of all the existing orders relating to classification of cities/towns for the purpose of grant of HRA to Central Government employees, cities/towns shall now be re-classified as “X”, “Y” and “Z” for the purpose of HRA as enumerated in the Annexure to these orders.

3. Consequent upon implementation of the recommendations of the 5th Central Pay Commission, certain cities / towns were placed in a lower classification as compared to their existing classification for HRA purpose, vide this Department’s O.M. No.2(30)/97-E.II(B) dated 03.10.97. However, these cities/towns were allowed to retain their existing higher classification, vide Para 3 thereof; and further extended vide O.M. No.2(21)/E.II(B)/2004 dated 16.03.2005 & O.M. No.2(13)/2008-E.II(B) dated 07.01.2009. As other cities / towns to which protection of retaining earlier higher classification was allowed, got upgraded during the intervening period and as on date only two cities i.e. Ajmer in Rajasthan and Durgapur in West Bengal were retaining such protection. Consequent upon upgradation of these two cities also on the basis of their population as per Census-2011, provisions contained in Para 3 of this Department’s O.M. No. 2(30)/97-E.II(B) dated 03.10.97 which Were allowed to further continue vide O.M. dated 16.03.2005 & 07.01.2009, stand withdrawn/discontinued.

4. Special orders allowing continuance of HRA at Delhi (‘X” class city) rates to Central Government employees posted at Faridabad, Ghaziabad, NOIDA and Gurgaon, at Jalandhar (“Y” class city) rates to Jalandhar Cantt., at “Y” class city rates to Shillong, Goa & Port Blair vide this Department’s O.M. No.2(13)/2008-E.II(B) dated 29.08.2008, and continuance of HRA at par with Chandigarh (“Y” class city) to Panchkula vide this Department’s O.M. No.2(13)/2008-E.II(B) dated 04.03.2011, shall continue to be applicable till the recommendations of 7th CPC are considered by the Government.

5. These orders shall take effect from 1st April, 2015.

6. The Orders will apply to all civilian employees of the Central Government. The orders will also be applicable to the civilian employees paid from the Defence services Estimates. In respect of Armed Forces personnel and Railway employees, separate orders will be issued by the Ministry of Defence and the Ministry of Railways, respectively.

7. In so far as the persons serving in the Indian Audit and Accounts Department are concerned, these orders issue in consultation with the comptroller & Auditor General of India.
Authority: www.finmin.nic.in

Click to view the order in English

7th Pay Commission contemplates to recommend the Compensatory City allowance again

7th Pay Commission contemplates to recommend the Compensatory City allowance again

Sources said that the 7th CPC may recommend the Compensatory City allowance in its report for Central Govt employees. Upto 5th Pay Commisson, CCA has been granted to all CG Employees and we all know that the 6th CPC has abolished. The NC JCM Staff Side strongly suggested in its memorandum to introduce again the CCA to submitted to 7th Pay Commission earlier. The unconfirmed sources said, the CCA will come with two criteria as granting in the 5th CPC.

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

Source: http://7thpaycommissionnews.in/

Filling up of backlog vacancies

Filling up of backlog vacancies

The complaints/references relating to non-filling up backlog reserved vacancies in various Departments of the Government, as and when received, are forwarded to the concerned Department for appropriate action. The respective Departments/Ministries are required to take action for filling up of backlog vacancies identified from time to time.

As per information received from Ministries/Departments, 48,034 backlog reserved vacancies for Scheduled Castes, Scheduled Tribes and Other Backward Classes were filled up during the Special Recruitment Drive concluded on 31.3.2012. After the conclusion of the Drive, 19,676 backlog reserved vacancies were filled up.

The Government constituted a Committee in July, 2013 under the Chairmanship of Secretary, Ministry of Social Justice and Empowerment to make an in depth analysis of the reasons for backlog of filling up of reserved vacancies and suggest measures to enhance the employability of reserved category candidates. The Committee submitted its report and based on the recommendations of the Committee, deliverables to constitute in-house expert committee to identify backlog reserved vacancies, study the reasons for non-filling up of backlog reserved vacancies, review of educational qualifications and to conduct Special Recruitment Drive were communicated to the Ministries/ Departments to reduce the backlog vacancies for Scheduled Castes, Scheduled Tribes and Other Backward Classes in posts and services in the Central Government.

Apart from the Special Recruitment Drive to be launched after the identification and review of backlog reserved vacancies as described above, it was also decided that each Ministry/Department should initiate Special Recruitment Drive from the very beginning of the constitution of the Committee till the launch of the Drive from October, 2015 in respect of the backlog reserved vacancies in the Secretariat, attached/subordinate offices, Central Public Sector Enterprises, etc. as a concerted and continuous effort to reduce the gap of backlog reserved vacancies.

This was stated by the Minister of State for Personnel, Public Grievances and Pensions Dr. Jitendra Singh in a written reply to a question by Shri Shivkumar Udasi in the Lok Sabha today.

PIB News

Para Military Service pay only under consideration not OROP

Para Military Service pay only under consideration not OROP – Minister said in Parliament

While answering to a question in Parliament today (22.7.2015) on the demand of OROP to Paramilitary Forces, the Minister of State for Home Affairs said there is no proposal under consideration by the Ministry.

Demand of One Rank One Pension by paramilitary forces
There have been some requests demanding One Rank One Pension on the line of demand in Defence Forces. There is no proposal under consideration of the Ministry on the issue.
Proposals regarding granting of Para Military Service pay and enhancement of casual leave at par with Army have been received in this Ministry. The same have been referred to the 7th Central Pay Commission for consideration.

This was stated by the Minister of State for Home Affairs, Shri Kiren Rijiju in a written reply to a question by Smt. Rajani Patil and Shri A.K. Selvaraj in the Rajya Sabha today.

Source: PIB News

Preparation of list of Government servants due to retire along with their Aadhaar numbers and incorporation of Aadhaar number in PPO Booklet

Preparation of list of Government servants due to retire along with their Aadhaar numbers and incorporation of Aadhaar number in PPO Booklet: CPAO's OM

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF EXPENDITURE

CENTRAL PENSION ACCOUNTING OFFICE

TRIKOOT-II, BHIKAJI CAMA PLACE,

NEW DELHI-110066

PHONES : 26174596, 26174456, 26174438

CPAO/Tech/Jeevan Pramaan/2015-16/515 to 662.

10.07.2015

Office Memorandum

Subject:- Preparation of list of Government servants due to retire along with their Aadhaar numbers and incorporation of Aadhaar number in PPO Booklet.

1. As a part of Digital India initiatives, Digital Life Certification (DLC) of the pensioner has been made an option for submission of life certificate by the pensioner in the month of November each year. As the role of Aadhaar has become vital, a column for Aadhaar has already been provided in the Pension Payment Order booklet. Accordingly, all Heads of Offices have to ensure that wherever available same is provided to their Pay & Accounts Offices alongwith pension papers of the retiring government servants. In this regard, a provision has also been made in CAM-52 (PPO Booklet) by adding the following columns after existing column no.5.

6. Permanent Account Number for Income Tax (PAN)
7. Aadhaar No. (if Available)
8. Mobile No. (if Available)
9. E-Mail ID (if Available)

 

2. The seeding of Aadhaar with pensioners’ PPO number and their bank accounts is being closely monitored by Prime Minister Office. While this information is being regularly collected by CPAO from banks, the processing of fresh pension cases alongwith Aadhaar number is a very important requirement for expediting seeding of Aadhaar number by banks with PPO number & bank account and smooth implementation of submission of DLCs by pensioners in the month of November.

3. Further, attention is invited to Rule 56 of CCS (Pension) Rules which provides that:-

“(1) Every Head of Department shall have a list prepared every three months, that is, on the 1st January, 1st April, 1st July and 1st October each year, of all Government servants who are due to retire within the next twelve to fifteen months of that date.

 

(2) A copy of every such list shall be supplied to the Accounts Officer concerned not later than 31st January, 30th April, 31st July or 31st October, as the case may be, of that year.”

4. To avoid any delay in finalizing the pension cases all Heads of Offices should have first-hand information of the Aadhaar number while preparing the list of retiring government officials as per the provision of Rule 56 of CCS (Pension) Rules and should provide the same to the Accounts Officer concerned not later than 31st January, 30th April, 31st July or 31st October of that year.

 

5. In has been observed that during the month of June, 2015; out of 3101fresh PPOs (Pension Payment Orders), only in 220 cases Aadhaar numbers have been indicated. All Pr. CCAs/CCAs/ AGs are once again requested to ensure that all fresh PPOs are sent to CPAO with Aadhaar numbers wherever available and quarterly list of would be retirees as mentioned in para 3 & 4 above also mention Aadhaar numbers wherever available.

(Subhash Chandra)

Controller of Accounts

Source: http://cpao.nic.in/pdf/cpao_tech_jeevan_praman_2015-16.pdf

Status of Implementation of OROP

Status of Implementation of OROP

Ministry of Defence
Press Information Bureau
government of India

21-July, 2015

The principle of One Rank One Pension for the Armed Forces has been accepted by the Government. The modalities for implementation were discussed with various stakeholders and are presently under consideration of the Government. It will be implemented once the modalities are approved by the Government.

This information was given by Minister of State for Defence Rao Inderjit Singh in a written reply to Shri Neeraj Shekhar and others in Rajya Sabha today.

PIB

Revised Norms of IT Returns; Electronic Verification of Income Tax Returns For A.Y. 2015-16 Introduced

Revised Norms of IT Returns; Electronic Verification of Income Tax Returns For A.Y. 2015-16 Introduced

As per rule 12 of the Income-tax Rules, in case of individuals and certain other specified taxpayer, returns may be filed electronically followed by submission of signed paper copy of ITR-Verification form (ITR-V). However, to provide end-to-end enabled services to the tax payers, a facility has been introduced for electronic verification of the Income-tax Returns for A.Y. 2015-16 in these cases.

Under this, a taxpayer may verify his return through Internet Banking or through Aadhaar based authentication process.

For the convenience of small taxpayers having total income of Rs. 5 lakhs or below without any claim of refund, facility for generating Electronic Verification Code (EVC) has also been provided on the E-filing website of the Department. In such cases EVC will be sent to the Registered Email ID and Mobile Number of the taxpayer. Persons using this facility will not be required to submit a signed paper copy of ITR-V to the Income-tax Department.

Taxpayers are permitted to use Digital Signature Certificate (DSC) to verify their e-filed Income-tax return. The electronic signature is a type of DSC and can be used to verify e-filed Income-tax return. As mentioned above, the taxpayers can use their Aadhaar number for e-filing of return as per the Aadhaar based authentication process.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha today.

PIB

Automatic Refund of Confirmed/ Rac e-tickets on Cancellation of Trains Becomes Effective

Automatic Refund of Confirmed/ Rac e-tickets on Cancellation of Trains Becomes Effective

Ministry of Railways
Press Information Bureau,
Government of India

21-July, 2015

Ministry of Railways have decided to grant automatic refund of Confirmed/RAC e-tickets on cancellation of trains similar to waitlisted e-tickets. There shall not be any requirement for cancellation/filing of TDR for refund of e-tickets in case of cancellation of trains. This has become effective with effect from July 13, 2015.
However, in case of cancellation of trains, PRS counter ticket shall continue to be refunded across the reservation counter as per the existing provisions.

PIB

7th Pay Commission Rumours – Discarding Grade Pay system – Will it be beneficial ?

7th Pay Commission Rumours – Discarding Grade Pay system – Will it be beneficial ?

A study on difference in Fitment benefit for 7th Pay Commission Pay Fixation in the case of principles of 5th CPC Pay fixation is adopted in lieu of Fitment Benefit in the form of Grade Pay System evolved by 6th CPC

Fitment benefit in the form of Grade Pay provided by 6th CPC was computed based on highest pre-revised pay in each of the pre-revised Pay Scale – Fitment benefit advocated by previous pay commisions were reckoned with Pre-revised basic Pay drawn on the effective date of CPC

While Central Government Employees keep their fingers crossed after 7th Pay Commission finished all the interaction sessions with the Employees Federations and started finalising its report to be submitted to Govt, many surmises and speculations have already started filling the air through Internet and through word of mouth about possible 7th CPC pay fixation methods.

Some of those 7th Pay Commission rumours are as follows

• There will be no running Pay band and Grade Pay System
• The Minimum Pay will be Rs. 21000
• The uniform multiplication factor for arriving revised pay will be 2.86
• The Criteria for retirement age will be either completion of 33 Years of service or at the age of 60 Years whichever is earlier.

Interestingly, these rumours are spread out this time carry the tags as “inside information provided by Employees federations which participated in the 7th Pay Commission meetings”. The very character of a rumour is, it may be true or false. God only knows.

Among these, the unconfirmed news that 7th Pay Commission is to discard Pay Band – Grade Pay System may be affecting the Pay Structure of Central Government Employees very much if it is true.

In fact this is an off-shoot of proposal moot out by Confederation of Central Government Employees and Workers in its reply to 7th Pay Commission Questionnaire

In this background, we made an analysis as to whether discarding of Grade Pay System would be beneficial to Central Government Employees.

As per the proposal of Confederation, the Pay Band and Grade Pay system evolved by the 6th CPC brought about innumerable anomalies and the same has to be replaced by the Pay scale structure, which was in vogue prior to the implementation of the 6th CPC.

What was Pay Scale Structure prior to 6th CPC ?  How fixation pay was made in that pay scale ?

Obviously, Pay Scale Structure contemplated by Confederation is 5th Pay Commission Pay Structure which is the Pay Structure prior to 6th CPC pay Structure.
Now, let us have a look at the 5th CPC Pay Structure and how pre-revised 4th CPC Pay was revised and fit into the same.

5th Pay Commission Pay fixation Method :

As per Central Civil Services (Revised Pay) Rules 1997 which was notified by Ministry of Finance for implementation of 5th Pay Commission Report, Revised Pay Scales against 4th CPC pay scales are as follows

4th CPC Pay scales	5th CPC pay scales
750-12-870-14-940	S-1	2550-55-2660-60-3200
775-12-871-12-1025	S-2	2610-60-3150-65-3540
775-12871-14-955-15-1030-20-1150	S-2A	2610-60-2910-65-3300-70-4000
800-15-1010-20-1150	S-3	2650-65-3300-70-4000
825-15-900-20-1200	S-4	2750-70-3800-75-4400
950-20-1150-25-1400/950-20-1150-25-1500/1150-25-1500	S-5	3050-75-3950-80-4590
975-25-1150-30-1540/975-25-1150-30-1660	S-6	3200-85-4900
1200-30-1440-30-1800/1200-30-1560-40-2040/1320-30-1560-40-2040	S-7	4000-100-6000
1350-30-1440-40-1800-50-2200/1400-40-1800-50-2300	S-8	4500-125-7000
1400-40-1600-50-2300-60-2600/1600-50-2300-60-2660	S-9	5000-150-8000
1640-60-2600-75-2900	S-10	5500-175-9000
2000-60-2120	S-11	6500-200-6900
2000-60-2300-75-3200/2000-60-2300-75-3200-3500	S-12	6500-200-10500
2375-75-3200-100-3500 / 2375-75-3200-100-3500-125-3750	S-13	7450-225-11500
2500-4000	S-14	7500-250-12000
2200-75-2800-100-4000/2300-100-2800	S-15	8000-275-13500
2200-75-2800-100-4000	NEW SCALE	8000-275-13500(Group A Entry)
2630/- FIXED	S-16	9000
2630-75-2780	S-17	9000-275-9550
3150-100-3350	S-18	10325-325-10975
3000-125-3625/3000-100-3500-125-4500/ 3000-100-3500-125-5000	S-19	10000-325-15200
3200-100-3700-125-4700	S-20	10650-325-15850
3700-150-4450/3700-125-4700-150-5000	S-21	12000-375-16500
3950-125-4700-150-5000	S-22	12750-375-16500
3700-125-4950-150-5700	S-23	12000-375-18000
4100-125-4850-150-5300/4500-150-5700	S-24	14300-400-18300
4800-150-5700	S-25	15100-400-18300
5100-150-5700/5100-150-6150/5100-150-5700-200-6300	S-26	16400-450-20000
5100-150-6300-200-6700	S-27	16400-450-20900
4500-150-5700-200-7300	S-28	14300-450-22400
5900-200-6700/5900-200-7300	S-29	18400-500-22400
7300-100-7600	S-30	22400-525-24500
7300-200-7500-250-8000	S-31	22400-600-26000
7600/-FIXED /7600-100-8000	S-32	24050-650-26000
8000/- FIXED	S-33	26000(FIXED)
9000/- FIXED	S-34	30000(FIXED)

Further, 5th CPC revised pay of Central Government Employees was worked out by adding DA as on 01.01.1996, two installments of Interim Relief (IR-1 and IR-2) and 40% of pre-revised basic pay with Pre-Revised Basic pay drawn as on 01.01.1996. Then resultant revised basic pay was stepped up to nearest incremented pay in the revised 5th CPC pay scale against the existing 4th CPC pay scale in which the pay was drawn. The following illustration would provide clear cut idea about 5th Pay Commission Pay fixation method

Illustration for 5th Pay Commission Pay fixation

Existing 4th CPC pay scale	Rs. 1640-60-2600-75-2900
Revised 5th CPC pay scale	Rs. 5500-175-9000
Pre-Revised Basic Pay	Rs. 2360
D.A as on 01.01.1996 @ 148%	Rs. 3493
IR-1	Rs. 100
IR-2	Rs. 236
Add 40% of pre-revised B.P	Rs. 944
Total	Rs. 7133
Nearest incremented pay in revised 5th CPC pay scale —-A	Rs, 7250
If one increment is ensured in the revised pay scale for every three increments in the pre-revised pay scale, the revised basic will be —- B	Rs. 6250
5th CPC revised Basic Pay as on 01.01.1996 (A or B whichever is higher)	Rs. 7250

From the above it could be found that fitment benefit of 40% is calculated using the pre-revised basic pay received by an employee as on 01.01.1997. On the contrary, in the case of fitment benefit allowed by 6th Pay Commission in the form of Grade Pay, it has been calculated at 40% of highest Pay in each of 5th CPC Pre-Revised pay scale.

6th Pay Commission Pay Band and Grade Pay hierarchy

5th CPC Pay Scales		6th CPC Pay Band and Grade Pay
GRADE	SCALE	Pay Band		Grade Pay
S-1	2550-55-2660-60-3200	-1S	4440-7440	1300
S-2	2610-60-3150-65-3540	-1S	4440-7440	1400
S-2A	2610-60-2910-65-3300-70-4000	-1S	4440-7440	1600
S-3	2650-65-3300-70-4000	-1S	4440-7440	1650
S-4	2750-70-3800-75-4400	PB-1	5200-20200	1800
S-5	3050-75-3950-80-4590	PB-1	5200-20200	1900
S-6	3200-85-4900	PB-1	5200-20200	2000
S-7	4000-100-6000	PB-1	5200-20200	2400
S-8	4500-125-7000	PB-1	5200-20200	2800
S-9	5000-150-8000	PB-2	9300-34800	4200
S-10	5500-175-9000	PB-2	9300-34800	4200
S-11	6500-200-6900	PB-2	9300-34800	4200
S-12	6500-200-10500	PB-2	9300-34800	4200
S-13	7450-225-11500	PB-2	9300-34800	4600
S-14	7500-250-12000	PB-2	9300-34800	4800
S-15	8000-275-13500	PB-2	9300-34800	5400
NEW SCALE	8000-275-13500(Group A Entry)	PB-3	15600-39100	5400
S-16	9000	PB-3	15600-39100	5400
S-17	9000-275-9550	PB-3	15600-39100	5400
S-18	10325-325-10975	PB-3	15600-39100	6600
S-19	10000-325-15200	PB-3	15600-39100	6600
S-20	10650-325-15850	PB-3	15600-39100	6600
S-21	12000-375-16500	PB-3	15600-39100	7600
S-22	12750-375-16500	PB-3	15600-39100	7600
S-23	12000-375-18000	PB-3	15600-39100	7600
S-24	14300-400-18300	PB-4	37400-67000	8700
S-25	15100-400-18300	PB-4	37400-67000	8700
S-26	16400-450-20000	PB-4	37400-67000	8900
S-27	16400-450-20900	PB-4	37400-67000	8900
S-28	14300-450-22400	PB-4	37400-67000	10000
S-29	18400-500-22400	PB-4	37400-67000	10000
S-30	22400-525-24500	PB-4	37400-67000	12000
S-31	22400-600-26000	HAG+SCALE	75500-80000	NIL
S-32	24050-650-26000	HAG+SCALE	75500-80000	NIL
S-33	26000(FIXED)	APEX SCALE	80000(FIXED)	NIL
S-34	30000(FIXED)	CAB. SEC.	90000(FIXED)	NIL

We are of the view that if the 7th CPC fitment benefit is calculated on the basis of existing pre-revised pay as in the case of 5th CPC then revised 7th CPC pay would be lesser than the revised 7th CPC Pay calculated by adopting the methods 6th CPC, in which grade pay (fitment benefit) has been arrived at on the basis of highest pay in the pre-revised pay Scale.

At the same time it may not be viable to arrive 7th CPC fitment benefit on the basis of highest Pay in each of Pay Band as 6th CPC Pay Band Structure has been designed in such a way that each of the Pay band accommodates many 5th CPC Pre-Revised Pay Scales

However, even after discarding Grade pay System, if the fitment benefit for 7th Pay Commission Pay revision is provided on the basis of highest pay in the fitment table provided vide O.M 1/1/2008-IC dated 30.08.2008 for the each of the 5th CPC Pre-Revised Pay Scale, then it would be Pay wise beneficial to Central Government Employees.

We invite valuable opinion of readers in the form of comments to this article so that pay fixation method beneficial to Central government employees community can be highlighted

Source: gconnect

Maruti Suzuki to get boost from Seventh Pay Commission’s recommendations

Maruti Suzuki to get boost from Seventh Pay Commission’s recommendations

MUMBAI: Investors expect Maruti Suzuki to get a boost from the Seventh Pay Commission's recommendations later this year that will lead to salaries of government employees rising. The Pay Commission is expected to submit its report by October and this is likely to be implemented from July 2016, likely adding to an expected double-digit growth in passenger car sales in FY17. Maruti Suzuki is expected to be the main beneficiary, analysts said. The last Pay Commission report had resulted in car sales rising 18 per cent annually between FY09 and FY11.

"The Sixth Pay Commission, which was implemented in August 2008, resulted in almost 10 times increase in Maruti's sales to government employees from FY08 to FY12," Jatin Chawla and Akshay Saxena, research analysts at Credit Suisse, wrote in a July 15 report.

 

The market value of Tata Motors surged past Maruti Suzuki in 2010, after the Indian company turned JLR around following its acquisition from Ford in 2008. JLR more than made up for Tata Motors' poor domestic performance over the past few years. The Chinese decline has forced many carmakers to scale down targets.

JLR said June sales were flat because strong growth in Europe and North America was offset by a dramatic slowdown in China.

German luxury carmaker Audi has abandoned a target to sell 600,000 cars this year in China, its biggest market, as the country's stock market rout sapped demand for luxury cars, Bloomberg reported on Thursday. Audi's Chinese sales rose 1.9 per cent to 273,853 cars in the first half. Credit Suisse reckons that a salary increase could boost demand for cars in India by 10 per cent. It upgraded the expectation for volume growth at Maruti Suzuki for FY17 to 23 per cent from 17 per cent on account of the expected pay commission boost. It also increased the stock's target price to Rs 5,100 at the end of 2017 fromRs 4,370 previously. Maruti expects there will be a repeat this time around.

"We have sold almost 200,000 vehicles to government employees in FY15," said Randhir Singh Kalsi, executive director, sales, Maruti Suzuki. "We certainly believe we can get more incremental volumes after implementation of the Seventh Pay Commission." Maruti saw a pickup mostly in the Rs 2.5-5 lakh price bracket last time around.

 

Others also expect a bounce. "An increase in disposable income certainly will help potential buyers to purchase high quality products. So, definitely a salary hike of government employee will propel the industry growth," said Rakesh Srivastava, president, sales, Hyundai India. Growth was seen across segments and geographies after the last pay increase, he said.

There are about 30 lakh central government employees while state government workers number about three times that. About a fourth of them are paidRs 30,000-50,000 per month and nearly 10 per cent may buy cars, Credit Suisse estimates, adding up to an additional volume of about 300,000 units.

Among those who get a pay increase, those who have set aside enough for children's education and own a home will be the ones most likely to buy a new car, said Maruti's Kalsi, pointing out that brands will need to target the entire family, not just breadwinners.

"Importantly, car buying is no longer a prerogative of the parents and their teenage children now play an important role in choosing a car," he said.

Changing consumer preferences also indicate that it won't be just entry-level cars that are likely to rise; some may look to upgrade.

"We are (expecting) incremental demand from employees for compact as well as sedan cars," said Srivastava of Hyundai. Apart from the additional pay, arrears will also play a role. The Sixth Pay Commission award saw employees getting arrears for 32 months in two installments in FY09 and FY10. This means that any delays in payment enhance the ability of an employee to buy a car. Carmakers offer special discounts for government employees and it's easier for them to get loans from public sector banks as well.

 

Source : Economic Times