The sixth Pay Commission on Monday submitted its report to the government proposing a substantial increase in salaries and allowances of Central Government employees, while seeking to streamline allowances, pension and medical insurance.
The revised pay scales will be effective retrospectively from January 1, 2006, while recommendations relating to allowances will be implemented prospectively. Existing rates of most of the allowances have been doubled for both defence and civilian staff.
As per the revised pay scales, minimum monthly salary at entry level would be Rs 6,660 and the maximum —of a Cabinet Secretary and Service chiefs— would be Rs 90,000. Secretaries will get Rs 80,000.
In a first of its kind, the commission, recommended a performance related incentive scheme (PRIS) by which employees will be eligible for pecuniary remuneration over and above their pay. The PRIS will be budget neutral.
The panel, which presented the report to finance minister P. Chidambaram, suggested that number of grades be reduced to 20 from the existing 35.
Recommending a substantial increase in allowances and other benefits, the Commission suggested a 40 per cent increase in pension and family pension. It also proposed a performance related incentive scheme (PRIS). “A scheme of PRIS (performance related incentive scheme) has been recommended... It should also work as a substitute for bonus, honorarium and overtime allowances,” the report said.
The Commission also favoured a market driven compensation package to young scientist and posts requiring special expertise and skills, besides an enhanced pay scale for nurses, teachers, constabulary and postmen.
Seeking a substantial hike in allowances, the Commission recommended payment of arrears in two instalments and said that out of the total one-time expenditure of Rs 18,060 crore, as much as Rs 12,642 crore will have to be borne in the Union budget and the balance of Rs 5,418 crore in the Railway budget.
The recommendations will cost Rs 12,561 crore in 2008-09. The net financial implications are estimated to be Rs 7,975 crore for 2008-09. There would also be an additional, one time burden of Rs 18,060 crore on account of payment of arrears.
“All the recommendations to be treated as an organic whole as partial implementation will bring in several anomalies and inconsistencies,” the commission headed by Justice B.N. Srikrishna stated.
Other members of the commission included Professor Ravindra Dholakia and Sushma Nath as member secretary.
The commission proposed a 40 per cent hike for fitment in pre- revised basic pay, the report said: “The Commission is recommending a new structure of running pay bands and grade pay. In the structure, grade pay has been normally taken as 40 per cent of the maximum of the pre-revised pay scales.”
The panel said annual increments should be paid in the form of 2.5 per cent of the total pay and will be calculated from July 1.
Recognising the hardships faced by the defence personnel, the panel put the military services' pay on par with those recommended for civilians, while suggesting an allowance of Rs 6,000 per month for officers till the rank of Brigadier and equivalent.
It was in favour of continuing with a five-day week schedule, but suggested reduction in number of holidays to only the three national holidays.
All other gazetted holidays, it said, should to be adjusted by increasing restricted holidays from two to eight days annually.
The panel proposed higher education allowances to Rs 1,000 per child from the present Rs 50 per month and favoured staggered working hours, special leave for women and enhanced maternity leave for of 180 days.
It recommended that selection of higher posts to be filled by suitable officers within the government as well as by outsiders on contract to be get best domain-based expertise.
Interest subsidy up to 2 per cent to be given for grant of advances, where employees would borrow from an approved bank.