The Cabinet on Wednesday approved some key proposals concerning modifications in the 7th Pay Commission recommendations that are likely to benefit more than 55 lakh pre-2016 civil, defence and family pensioners.
A government spokesperson said the benefits of the proposed modifications would be effective from January 1, 2016 and would take the Centre’s annual pension bill to Rs 1, 76,071 crore.
One of the main concerns addressed through the modifications relates to disability pensions for soldiers. The Cabinet, headed by Prime Minister Narendra Modi, has given its go ahead to the retention of percentage-based regime of disability pension implemented post the 6th CPC, which the 7th pay panel report had recommended be replaced by a slab-based system.
The armed forces were up in arms against the slab-based system as it would have led to reduction in the amount of disability pension for existing pensioners as also for future retirees when compared to the percentage-based model. Another concern that has been addressed relates to military service pay and pay matrix that has been extended from 24 years to 40 years.
However, military sources said some key concerns pointed out by the armed forces such as non-functional upgrade (NFU) could be taken up separately. “We are yet to analyse what has been given and what hasn’t. But unresolved issues could be addressed later,” a senior officer said.