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The Sixth Pay Commission on Monday recommended a hefty increase in salaries of over four million central government employees, a move that would cost the exchequer Rs 12,561 crore in 2008-09.
The Commission, headed by Justice B N Srikrishna, submitted its report to Finance Minister P Chidambaram recommending implementation of the revised pay from January 1, 2006, which would impose an arrear payout burden of Rs 18,060 crore on the government.
The revised pays fixed the salary of Cabinet Secretary at Rs 90,000 a month and Secretary at Rs 80,000 per month, while making Rs 6,660 as the minimum entry level salary as against Rs 4860.
The implementations of the 6th Pay Commission will come into effect from January 1, 2006.
Recommending a substantial increase in allowances and other benefits, the Commission also suggested a 40 per cent increase in pension and family pension.
According to the report, the total number of grades will be reduced to 20 from the existing 35, the date of annual increment in all cases will be July 1 and the existing rate of House Rent Allowance (HRA) will be retained for A1 cities.
For A, B1 and B2 cities, the allowance will be 20 per cent higher, while the same for C and unclassified cities will be given the allowance at the
higher rate of 10 per cent.
The Pay Commission has also suggested that City Compensatory Allowance (CCA) be subsumed in transport allowance and the rate be increased fourfold, while it suggest that the base year for the Consumer Price Index (CPI) for computation of Dearness Allowance (DA) be revised as frequently as feasible.
Defence Forces will be given running pay bands and grade pay on par with those recommended for civilians. The Director General (Armed Force Medical Services) has been placed in the apex grade of Rs 80,000 (fixed).
In Defence Forces, only two trade group to be retained for personnel below Officer Ranks with the earlier trade groups Y and Z being merged. The personnel in trade group X will have an additional X group pay of Rs 1,400 per month.
It also suggested that existing rate of most of the allowances be doubled, both in case of defence forces and civilian employees and replacement of risk allowance by risk insurance.
To remove stagnation, running pay bands for all posts to the Government presently existing in scales below that of Rs 26,000 (fixed) have been introduced.
The reimbursement of education allowance will be raised from the existing level of Rs 50 to Rs 1000 per child per month, subject to the maximum of two children. The hostel subsidy will be raised from the existing Rs 300 per month to Rs 3,000 per month.
Pension will be paid at 50 per cent of the average emoluments/last pay drawn (which ever is more beneficial) without linking it to 33 years of qualifying services for grant of full pension.
The report further says that in case of government employees dying in harness, family pension will be paid at enhanced rates for a period of 10 years.
A new medical insurance scheme has been recommended for Government employees, and will be optional for existing Central Government employees and pensioners. New Government employees and new pensioners will be compulsorily covered by the scheme.
The fitment formula recommended for serving employees will be extended in case of existing pensioners family pensioners.
The rates of Constant Attendent Allowance for disabled pensioners will be increased by five times to Rs 3,000 per month.
The Revised Pay Scale
- PB-1: Minimum pay band to be Rs 6660 (Rs 4,860 as pay in the pay band plus Rs 1800 as grade pay)
- PB-2: Minimum pay band to be Rs 12,000 (Rs 8,700 as pay in the pay band plus Rs 4,200 as grade pay)
- PB-3: Minimum pay band to be Rs 21,000 (Rs 15,600 as pay in the pay band plus Rs 5,400 as grade pay)
- PB-4: Minimum pay band to be Rs 48,200 (Rs 39,200 as pay in the pay band plus Rs 9,000 as grade pay)