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Tuesday, September 30, 2008

Service chiefs discuss pay panel report with Antony

The armed forces on Tuesday submitted their revised salary vouchers ending a month-long deadlock over their decision to withhold "discriminatory" pay commission report, paving the way for the personnel to receive part arrears just in time for Diwali.

Simultaneously, the three services chiefs discussed the ways for moving forward on the issue at their regular weekly meeting here with Defence Minister A K Antony, Defence Ministry sources said.

"The meeting today was a regular weekly meeting of the Defence Minister with the Services chiefs. But pay commission issues were top on the agenda of the meeting," sources said.

The developments come after Prime Minister Manmohan Singh set up a three-member ministerial committee headed by External Affairs Minister Pranab Mukherjee last Friday to consider their four core issues.

Also, Antony had taken a tough stand and asked the defence chiefs to accept the 6th Central Pay Commission (CPC) recommendations temporarily, after their decision to withhold its implementation.

Though the defence forces submitted their revised salary bills, the personnel would receive their first pay under the CPC scales only in their November salaries. But this would enable the government to pay the part arrears to the personnel before this weekend, sources said.

The Defence personnel's salaries at old pay scales for October were already credited into their bank accounts, as the armed forces agreed to submit their revised pay vouchers only now, the sources said.

Thursday, September 25, 2008

70 per cent "pensionary weightage" to jawans

The government has agreed to restore 70 per cent "pensionary weightage" to jawans, even as Defence chiefs on Thursday intensified efforts to get "anomalies" in the 6th Pay Commission notification removed.

"The government has given in principle approval to reverting to the 70 per cent pensionary weightage, as demanded by the Services, overruling the 50 per cent recommended by the Central Pay Commission (CPC), providing much-needed relief just before this Diwali," top Defence Ministry sources told reporters here.

Espousing their cause, the Services chiefs today apprised Cabinet Secretary K M Chandrasekhar and officials in the Prime Minister's Office (PMO) on the issues.

Earlier, jawans used to get 70 per cent of their last drawn pay as pension calculated on the basis of their 10-month average salary before retirement.

Under the CPC notification, the jawans, who form the backbone of the Armed Forces but retire at a relatively young age, are to be provided with the option of lateral entry in to the Central police forces and paramilitary and in return, they would get reduced "pensionary weightage" of 50 per cent.

In order to resolve this issue, Defence Minister A K Antony had written a strong letter to both Prime Minister Manmohan Singh and Finance Minister P Chidambaram, particularly batting for the jawan's pensionary benefits, reduced by the CPC.

Tuesday, September 23, 2008

'Save India Campaign' launched by scientists to attract & retain the young scientific talent

Confederation of Atomic and Space Scientists/Technologists (COAST)  met on the second COAST meeting exhibited the concern over the exodus of experienced scientists from these premier departments DAE & DOS. In order to attract and also retain the young scientific talents in these organisations, a 'Save India Campaign' was launched. More details at the NATIONAL FEDERATION OF ATOMIC ENERGY EMPLOYEES Blog

Conveyance Allowance and Travelling Allowance

Department of Expenditure, The Ministry of Finance has issued office memorandum related to the acceptance of sixth pay commission recommendations on Conveyance Allowance and Travelling Allowance.

The memorandum on Conveyance Allowance can be downloaded from here 

The memorandum on Travelling Allowance can be downloaded from here

LTC Acceptance

The Ministry of Personnel, Public Grievance & Pension Department of Personnel Training has issued office memorandum related to the acceptance of sixth pay commission recommendations on LTC. The main points are

  • Parents dependent on the Govt. employees are eligible for LTC irrespective of whether they are staying with Government employee or not.
  • Fresh employees can avail 3 home town travel and one to any place in India during the first two block of for years.
  • Travel entitlements for LTC will be same as that of official tour with no daily allowance.

The memorandum can be downloaded from here

Monday, September 22, 2008

Antony urges PM to address forces’ pay panel demands

As the armed forces have refused to take their salaries recommended by the pay panel unless their “core issues are addressed, Defence Minister A.K. Antony has written to Prime Minister Manmohan Singh to take their demands into consideration.

Antony’s letter comes after the three services’ chiefs put their foot down and sought redressal of their demands pertaining to the Sixth Pay Commission.

Antony last week strongly recommended that the prime minister and the finance minister (P. Chidambaram) consider the four issues raised by the forces, a defence source said Monday.

The reviewed report of the Sixth Pay Commission has upgraded the civilian and paramilitary counterparts of officers of the rank of lieutenant colonel and equivalent to a higher pay band.

As a result, civilian officers who were in the lower pay bracket and were hitherto drawing lesser pay than lieutenant colonels and officers of equivalent rank would now draw a higher basic salary.

The armed forces have been contending that these core issues would affect the joint operations of the armed forces and paramilitary forces.

The report of the Sixth Pay Commission, headed by Justice (retd) B.N. Srikrishna, was submitted to Finance Minister Chidambaram March 24.

It led to protests from both civilian and defence personnel, following which the government appointed a committee under Cabinet Secretary K. Chandrashekhar to study the various demands for financial corrections.

Saturday, September 20, 2008

Antony favours armed forces, wants anomalies in Sixth CPC sorted out

Defence Minister A K Antony has strongly favoured sorting out of anomalies in the Sixth Central Pay Commission (CPC) notification raised by the three services chiefs in their representation to the government.

In his latest letter to Finance Minister P Chidambaram this week, Antony raised the issues, including the ones relating to Personnel Below Officer Rank (PBORs), top Defence Ministry sources said in New Delhi on Friday.

Yes, the Defence Minister has written a letter to the Finance Minister in which he has raised certain issues relating to the disparities that has crept into the pay commission notification, the sources confirmed.

Among the issues raised by Antony was the one relating to the extant pensionary weightage and sought that it be restored till the time the proposal for lateral entry for them into paramilitary and central police forces was approved and implemented.

Under the Sixth CPC proposal, the PBORs are to be given an opportunity for lateral entry into the paramilitary and central police forces, but they would forego 50 per cent of their pension calculated on the basis of their last drawn pay at retirement.

But the government is yet to approve the proposal for lateral entry, which has led to a situation where the PBORs lose out both on re-employment and pension fronts.

Most PBORs retire at a relatively young age of about 35 years, after putting in about 15 to 17 years of service in the armed forces, a move aimed at keeping the fighting force young.

Friday, September 19, 2008

DOPT issues clarification on Increment and promotions after 1-1-2006.

DOPT has issued fresh clarification on increment and promotions after 1-1-2006.
tween 1-2-2005 and 1-12 2005 are eligible for increment on July 2007 as they completes 6 months after increment. For those whom the increment is on 1-1-2006, the news scale is considered including the increment on 1-1-2006. They are also eligible for increment on July 2007.  

The memorandum also clarifies on the promotions after 1-1-2006.
It can be accessed at http://164.100.50.223/six_pay_comm/clarifications.pdf

6th pay gains: Cut taxes to benefit staff

Government employees are upbeat over the Sixth Pay Commission report, little realizing that more than them it is the Government which is the main beneficiary. Of the Rs 16,000-crore benefit that the panel is supposed to give over Rs 5,300 crore would go back to the Government by way of income-tax at 33 per cent alone. In fact, some employees would now be subjected to an additional tax as their salaries would touch the Rs 10-lakh per annum mark.

In its latest report, the Reserve Bank of India has come up with the desired suggestion of reducing the income-tax rate and raising exemption limits, for increasing the disposable income and ease inflationary pressure. The high inflation rate, around 13 per cent on wholesale price index (more on the basis of consumer price index) has already eroded substantial part of the pay panel benefit. The taxes would eat up the rest.

It is well-known that wage revision is undertaken primarily to neutralise the effect of price rise. One, it is dearness allowance component which takes care of it marginally. Two, it keeps the market going at an even pace. For with higher wages one is expected to increase purchases and help other sectors of the market.

It is no secret that the market is highly depressed owing to high inflationary pressure. Industrial growth too has slid. "There are also some downside risks to the industrial growth momentum during 2008-09", admits the RBI. Growth in other sectors too has fallen including infrastructure, power and the core sector. Thus raising, what RBI says are "apprehensions regarding sustainability of industrial and manufacturing growth".

Clearly, the central bank is concerned that inflation has eroded the disposable income of the middle-class, supposedly the "engine" for overall growth. It has, in no uncertain terms, expressed concern that the Government has not taken any step to rectify this and is circumspect on the benefit to the market of the so-called 'higher wages' of Central Government employees. Moreover, the RBI is wary that as the salaried class is in a tight spot, it may default on repayment of EMIs and pose a risk to the banking system.

In the face of the above, the RBI has thus vociferously suggested "adjustment" - the bank's euphemism for reduction - in the income tax and excise duty for increasing the disposable income of the middle-class. "It may have a possible impact on consumption demand for industrial goods," is the RBI's guess.

In all fairness, higher salaries were expected to surge other economic activities. But with the government policy eating into the kitty itself, that opportunity is lost. Therefore, it is time the Government has a re-look at its tax policy. The taxes, be it corporate or personal income-tax, remain at a very high level. Over the years, big time industrialists--Rahul Bajaj, Arun Bharat Ram or Sanjiv Goenka, Nusli Wadia, or Ajay Piramal--have expressed concern over the high tax regime. There is unanimity that high taxes only lead to avoidance and evasion. And yet our Government has unfortunately not tied up the taxes with its liberalisation policy.

Moreover, often taxes are unproductive and unimaginative. The answer lies in lowering the taxes and abolishing the personal income tax, which unfortunately has come to be known as the "impoverishing tax". The Kelkar committee had estimated that 48 per cent of the direct tax collected goes into tax administration! It is certainly one of the most expensive systems of realisation of resources. Any corporate would simply go bust at this kind of a cost.

Let's study the scenario. Today, there are more I-T commissioners and naturally the administration costs have gone up. In addition, the income-tax department has started spending on decorative and unrelated activities. As such, the Government not only needs to review the size of the department but also prune it. This apart, extra staff in a department means not so clean operations, as some instances have shown.

Many a times the large official force ends up causing harassment to the public simply because it is under pressure to justify its existence. This again adds up to the cost. Then there are the subsequent litigation and appeal processes, which too are a burden on the economy, other than causing loss to productive man hours. The cumbersome I-T rules only make the process more difficult. A Mahabharata of rules are eventually added every yea and each has several interpretations.

In the past, the Government has had the experience of overall higher tax accrual following tax rates being moderated from 97 per cent to 33 per cent. This meant an erosion of over one-third income in direct tax. And, there are umpteen cases of indirect taxes, which rob an average Indian of almost another 40 per cent of his/her income.

Thus, it is crystal clear: tax rates need to be cut. Finance Minister P Chidambaram must examine the pros and cons of a high tax regime carefully, so that all the money that is being generated is gainfully utilized and not burnt up. The Government should, in fact bring it down to the level of five per cent for an income up to Rs 5 lakh a year and beyond that to a maximum level of 10 per cent. Even the corporate incomes should not be taxed at more than 15 per cent.

Let's face the fact that if the taxes were low, people would voluntarily prefer to pay rather than avoid these. At the same time, the Government's coffers would get bulkier as more and more people would be integrated with the system. As of now most taxpayers are out of it and the taxmen are well aware.

What is being suggested is no revolutionary step. It only makes the tax system more imaginative, less exploitative and interwoven with market realities. At the end, an affordable tax regime would reduce the cost of tax policing, boost the market and bury inflation.

Tuesday, September 16, 2008

DRDO seeks foreign help in attracting, retaining talent

Bleeding from an exodus of talent, India’s premier military research body Defence Research and Development Organisation (DRDO) is seeking tips from other countries in attracting and retaining the best scientific brains.

We have organised an international workshop on ‘Future roadmap for Science and Technology Network’, where experts from the US, Britain, Australia, Germany and Israel will deliberate upon the issue, said Arun Kumar, director of the DRDO’s Recruitment and Assessment Centre.

‘Our main objective is to gain from their experience in highly specialised areas like scientists’ recruitment and retention,’ Kumar added.

Former president A.P.J. Kalam, who once headed DRDO, will inaugurate the four-day workshop that will also see participation by scientists and other stakeholders from the public and private sectors, as also the government.

DRDO, which celebrates its golden jubilee this year, loses a scientist every second day to a plum post in the private sector. According to the defence ministry, 1,107 scientists - mostly young entrants - have resigned from DRDO between 2003 and 2007.

DRDO has a strength of 7,000 scientists, and the attrition rate is about 6.3 percent. The DRDO anually recruits 900 scientists. The private sector has been lapping up the young scientists, who get a comparatively lesser packages in the DRDO.

Created in 1958 to be the country’s premier organisation in defence research and to enhance the country’s self-reliance in military requirements, the DRDO today is reeling under a major manpower crunch. It is able to fill up only 60-70 percent of the vacancies for scientists that arise in the organisation.

DRDO scientists are in great demand in the private sector as they have considerable expertise in areas like aeronautics, armaments, combat vehicles, electronics, instrumentation engineering systems, missiles, naval systems, advance computing, simulation and life sciences.

It is not only the pay package that is affecting the morale of the scientists but also the lack of facilities, bureaucratic red tape and the slow and frustrating pace of research.

DRDO had sent a comprehensive proposal to the Sixth Pay Commission on incentives for scientists, including reimbursement of telephone and Internet expenses, entitling all scientists to air travel on official duty - perks that most private sector executives take for granted.

However, the recommendations of the Sixth Pay Commission have not gone down well with DRDO scientists.

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Monday, September 15, 2008

Big raise on cards for university teachers

A University Grants Commission pay panel has promised that the average raise for university teachers will be higher than what corresponding government officials are to receive under the Sixth Pay Commission.

The committee, headed by former Jawaharlal Nehru University (JNU) vice-chancellor G.K. Chadha, is also set to recommend a uniform retirement age. The age is 65 in central universities but, as Chadha pointed out, it varies from 55 to 70 in educational institutions under states.

“We will ask all states to invoke a uniform policy on the age of retirement and re-employment of teachers. The uniformity is essential to rid India’s higher education sector of inter-regional disparities,” Chadha said today.

The committee has been criticised by teachers’ bodies for failing to submit its report by the September 6 deadline.

The panel was set up along with the Sixth Pay Commission and both reports were to be implemented together. The Centre finalised the findings of the pay commission and notified the recommendations last month. Government staff were granted hikes ranging from 12 to 21 per cent a year.

The Chadha panel asked for more time and was granted a month’s extension. The committee, Chadha said, had arrived at a consensus on “most issues” and would start writing the report next week.

If the government accepts the hike suggested by the UGC committee, it will be effective from January 1, 2006, the date from which the central officials’ pay has been revised.

Chadha said the committee had outlined several proposals to help retain top-quality teachers in academics. “We will focus at the entry level, on those just completing their academics and contemplating a life of teaching. We want to lure them into the profession.”

“We cannot offer the red-carpet treatment that the corporate sector can, but we plan to offer them better research facilities to keep them (faculty) in our universities.”

The Chadha committee also suggested an annual appraisal of teachers and more flexible growth opportunities.

Higher education faces a massive teacher crunch, with dozens of vacancies to be filled, many of them at premier institutions like the Indian Institutes of Technology (IITs) and the Indian Institutes of Management (IIMs).

The UGC panel is also set to recommend a “carrot-and-stick” policy for states. The Centre contributes 80 per cent of the money for paying university teachers and its share is independent of the extent to which states have implemented the recommendations of the previous pay panel.

“The central assistance should continue, but only for those states willing to adopt all recommendations accepted by the Centre,” Chadha said.

Saturday, September 13, 2008

Excise, Customs men up in arms against pay panel 'anomalies'

Peeved by the recommendations of the Sixth Pay Commission, superintendents of Central Excise and Customs have decided to stage a protest before Parliament on September 16 to press for higher pay scale and better promotional avenues.

"The reason behind it (the protest) is the apathetic and indifferent attitude of the authorities concerned in matters of promotion, pay scale, working condition, staff position etc," the All India Association of Central Excise Gazetted Executive Officers (Delhi unit) said in a statement on Friday.

The government has already notified the recommendations of the Sixth Pay Commission, which will put a burden of over Rs 23,000 crore on the government coffers during the current financial year.

The Association has alleged that compared to employees in other cadres, the promotional opportunities are far less for inspectors and superintendents engaged in collection of indirect taxes like Central Excise, Customs, Service Tax, Inland Air Travel Tax and Foreign Travel Tax.

It further said the Sixth Pay Commission has failed to address their grievance of equity with the employees working in other departments like Central Bureau of Investigation, Intelligence Bureau, police etc.

The income tax inspectors, officers, examiners and appraisers have better promotional opportunities, while the Central Excise superintendents retires as superintendents, despite being recruited through the same competitive examinations, the statement said.

Thursday, September 11, 2008

Ordinary employee get 20% hike and president gets 300%

The Government of India has enhanced the emoluments of the President of India, the Vice President and state governors to Rs 1.5 lakh, Rs 1.25 lakh and Rs 1.10 lakh per month respectively. The hike comes close on the heels of Government announcing a bonanza for its employees by implementing the recommendations of the Sixth Pay Commission report under which an ordinary employee gets a hike of 20%. Is this justified? We are not seeing the amount of hike but the percentage. Will this help to improve the morale of ordinary employees. Post your comments here.

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Wednesday, September 10, 2008

Armed forces take pay panel grievances to finance minister

Indian Navy chief Admiral Sureesh Mehta has met Finance Minister P. Chidambaram and Minister of State in the Prime Minister's Office (PMO) Prithviraj Chavan with the grievances of the armed forces over the pay panel's recommendations, an official said Wednesday.Unhappy with the lowering of parity in payscales in comparison with the bureaucracy and paramilitary forces, Admiral Mehta met Prime Minister Manmohan Singh Sep 4 and drew his attention to the issue arising from the Sixth Pay Commission's recommendations.

"Admiral Mehta met Chidambaram and Chavan yesterday (Tuesday) on the core issues in the pay commission's report concerning the armed forces," the official said on condition of anonymity.

The armed forces earlier sought that the cabinet, rather than the anomalies committee of the finance ministry, should consider the matter. The cabinet, following the assurance of the prime minister, is likely to take up the "core issues" of the armed forces at its meeting Thursday.

The reviewed report of the Sixth Pay Commission has upgraded the civilian and paramilitary counterparts of officers of the rank of lieutenant colonel and equivalent to a higher pay band.

As a result, civilian officers who were in the lower pay bracket and were hitherto drawing lesser pay than lieutenant colonels and officers of equivalent rank would now draw a higher basic salary.

Following the revised report, even a short service commissioned officer in the paramilitary forces will get a higher pay than most permanent commissioned officers in the armed forces.

Besides drawing higher pay, the civilian and paramilitary officials have gained ascendancy in terms of ranks over their armed forces counterparts.

The armed forces have been contending that these "core issues" would affect the joint operations of the armed forces and paramilitary forces.

Admiral Mehta, in his position as the chairman of the chiefs of staff committee, wrote a letter to Defence Minister A.K. Antony Sep 1 urging that the parity between the armed forces and paramilitary and bureaucracy be "immediately restored".

Earlier, the Personnel Below Officer Rank (PBORs) used to draw a pension in proportion to their years of service, but according to the reviewed report, the PBORs will get pension half of their last pay drawn.

"The PBORs are put at a disadvantage as due to truncation of career they retire early and draw lesser pay relatively and hence end up getting lesser pension," Admiral Mehta said in the letter.

He has also sought inclusion of the officers of the rank of Lt. Gen. and equivalent in the Higher Administrative Grade Plus category, created in all services except the armed forces. The directors general have been placed in the HAG plus category.

The report of the Sixth Pay Commission, headed by Justice (retd) B.N. Srikrishna, was submitted to Finance Minister P. Chidambaram March 24.

It led to protests from both civilian and defence personnel, following which the government appointed a committee under Cabinet Secretary K. Chandrashekhar to study the various demands for financial corrections.

Tuesday, September 9, 2008

New website for discussion forum

We have been facing regular server downtime due to the huge traffic since the gazette notification for the sixth pay commission was released. To reduce the downtime we have a new website for the discussion forum at http://www.staffcorner.net/talk/ . We have also added two new forums - for defense personals and for pensioners.   

Sunday, September 7, 2008

IT officials appeal to Manmohan on pay anomalies

Unhappy with modified Sixth Pay Commission award, taxmen have pointed out discrepancies in the revised pay scale and have sought Prime Minister Manmohan Singh's intervention in the matter.

Pointing out the discrepancies in the revised pay scale, income tax officials said when compared with their counterparts in some other departments, it amounted to virtually "lowering of status" of senior revenue officials.

"We are shocked at the decision of the government to ignore recommendations of the Pay Commission to upgrade the pay scale of members of CBDT to Rs 80,000 (fixed), even though the pay scales of Directors General of Police and Principal Chief Conservators of Forests have been upgraded without any recommendation," said a memorandum submitted by the Indian Revenue Service Association.

Group `D` staff may not require to pay tax on arrears

Group 'D' employees of the Central government, including peons and drivers, can heave a sigh of relief as they are likely to get their 40 percent salary arrears in full without any income tax deduction on implementation of Sixth Pay Commission recommendations.

While the Group 'D' government employees will not have to pay tax on arrears, those belonging to higher levels can also claim marginal benefit by filing Form 10E of the Income Tax Returns, said a senior official of the Central Board of Direct Taxes (CBDT).

Among the Group 'D' employees, drivers receive highest salary because of over-time allowance, the tax official said, adding, "even they will fall short of the taxing limit by a whisker."

High ranking officials would not get as much benefit as their Group 'D' counterparts get as they already are in a larger tax bracket and may also be required to pay a "surcharge" on their salaries, Chartered Accountant Subhash Lakhotia said.

The government while approving the Pay Commission's recommendations said 40 percent of the arrears would be paid in the current year, while the remaining 60 percent would be disbursed in the next financial year. The arrears are with effect from January 2006.

On income tax liability on salary arrears, the official said, government employees would be required to pay taxes only on arrears which they would receive during the current year along with the benefits entitled under Section 89 and Rule 21 AA of the Income-Tax Act.

Lakhotia said senior officials "will only get a marginal benefit after filing Form 10E as the income-tax exemption limit for current year has increased."

Saturday, September 6, 2008

Gazette Notification of Ministry of Railways on 6th Pay Commission

Ministry of Railways has announced Gazette Notification on 6th Pay Commission or Sixth Pay Commission.
Gazette Notification of Ministry of Railways on 6th Pay Commission (RBENo.103/2008)
Hindi  /  English

New pension rules with better pay panel package

This should cheer former central government employees. With the Centre notifying the new pension rules, they can expect a higher pension packet from next month. The revised pensions are higher than what the sixth Pay Commission recommended.

Although the move benefits the cross-section of retired employees, those in higher brackets have gained more in real terms. New pensions for defence and railway personnel will be notified separately.

Older pensioners have an added reason to rejoice. Centenarians will get 100% extra pension calculated at revised rates. Similarly, those over 80 years will get an additional 20% of their basic pension. This goes up by 30%, 40% and 50% for those over 85, 90 and 95, respectively.

To get an idea of the quantum of hike, a person with a basic pension of Rs 10,000 — who used to get Rs 22,050 in hand — will now receive a total pension of Rs 26,216. The new rates are effective from January 2006 and the arrears will be given out in two instalments — 40% during the current fiscal, 60% in 2009-10 .

The maximum gratuity too has been revised to Rs 10 lakh, up from the earlier Rs 3.5 lakh. If an employee dies during service, his family will now get full pension (enhanced family pension) for 10 years.

The new rules also add more flexibility in retirement benefits. For instance, those who are due to retire can now get 40% of their pension commuted and get a lump sum amount in turn.

GOLDEN SMILES

Minimum pension Rs 4,060, up from earlier Rs 2,813 in hand (revised pension to be effective from Jan 1, '06).

Maximum pension Rs 52,200, up from Rs 33,075.

Maximum gratuity up to Rs 10 lakh (depending on years of service and last salary drawn).

Enhanced family pension, for employees dying in service, to be full pension for 10 years.

Employees eligible for full pension if service is for 20 years.

Incremental additional pension for those 80 years and above. People over 100 to get double pension.

(Courtesy: Timesofindia.com )

Armed forces take pay panel grievances to PMO

Unhappy with the lowering of parity in payscales in comparison with the bureaucracy and paramilitary forces, the armed forces have drawn Prime Minister Manmohan Singh’s attention to the issue rising from the Sixth Pay Coommission’s recommendations.

The Chiefs of Staff Committee chairman and Indian Navy chief Admiral Sureesh Mehta met the prime minister on Thursday and discussed the issue with him.

“Admiral Mehta has gone to the prime minister to brief him about his recent visit to Japan and South Korea and seized the opportunity to draw his attention to the erosion of parity between the armed forces officers and their civilian and paramilitary counterparts,” a senior official said, speaking on condition of anonymity.

It is understood that the prime minister assured the naval chief that he would consider the issue.

Ahead of meeting the prime minister, Mehta wrote to Defence minister A K Antony on September 1 that these “core issues” would affect the joint operations of the armed forces and paramilitary forces. He also asked the cabinet, rather than the anomalies committee, to consider their demands over the pay panel report.

“The command and control functions will be seriously hampered between the army, BSF (Border Security Force) and CPMF (Central Paramilitary Forces), and infighting will jeopardize the operations,” the letter says.

The reviewed report of the Sixth Pay Commission has upgraded the civilian and paramilitary counterparts of officers of the rank of lieutenant colonel and equivalent to the higher pay band. Due to this, civilian officers who were in the lower pay bracket and were hitherto drawing lesser pay than lieutenant colonels and officers of equivalent rank would now draw a higher basic salary.

Following the revised report, even a short service commissioned officer in the paramilitary forces will get a higher pay than most permanent commissioned officers in the armed forces.

Friday, September 5, 2008

Anomalies in Annual Increment Dates

[  From the comment on the Sixth Pay Commission Blog by jkchat ]

I would like to point out the following anomalies about Annual Increment:

(i)The Hindi Version of the Resolution dated 29.8.2008 states (page no. 16; Paragraph VII (iii) that the Government has accepted CPC recommendation with the modification that there would be two dates of increment, viz., 1st January and 1st July of each year.

However, the English version of the Resolution (page no. 43; Paragraph VII (iii)says that the Government has accepted CPC recommendation of granting Annual Increment, in all cases, on 1st July in respect of employees completing six months and above in the scale as on 1st July.

Which is the correct position, the Hindi version or the English version?

(ii) The Notification dated 29.8.2008 for the CCS(RP) Rules, 2008 states (page 39; Paragraph 10) as under:
"There will be a uniform date of annual increment, viz., 1st July of every year. Employees completing 6 months and above in the revised pay structure as on 1st of July will be eligible to be granted the increment. The first increment after fixation of pay on 1.1.2006 in the revised pay structure will be granted on 1.7.2006 for those employees for whom the date of next increment was between 1st July, 2006 to 1st January, 2007.

The Rule is silent about those employees whose date of increment was between February, 2006 to June, 2006. Why this discrimination against the employees who had their dates of increment between February 2006 and June 2006?

(iii) The OM dated 30.8.2008, which prescribes the mode of implementation of the CCS(RP) Rules state [paragraph 2 (iii)]the following, confuses the matter even further:

".....Consequently, in the case of employees whose date of next increment falls on 1.1.2006, the increment will be drawn in the pre-revised scale and pay fixed in accordance with the tables after including this increment. The next increment in the revised pay structure in such cases will be drawn on 1st July, 2006."

Thus, this OM omits the cases of all employees but of those whose date of increment was on 1.1.2006.

The above anomalies need to be looked into. While increments of the employees whose dates of increment were between July to December 2006 are being advanced,the cases of employees with the date of increment on 1.1.2006 are being taken care of, the employees with the dates of increment between February and June, 2006 have simply been ignored and being discriminated for no valid reason

TRICKS

<From a comment posted in the sixth pay commission blog>

My fellow Govt. employees, I want to draw your kind attention to the TRICKS played by this anti-govt. employee Government.

(1) The base year for calculation of DA has been changed to 2001 from 1982. this will results in lesser DA in coming years. even during current very HIGH inflation scenario we have got only 4% DA in last 6 months. So, you can imagine what will happen in coming years (hardly 2% increase). If the 5th pay comminssion would have continued then we would have got at least 8% DA, and it would have been merged with our basic pay. So, government played a dirty politics to divert our attention from this matter. Now, we can see how small the rise is compare to previous pay commission.

(2) This government has showered its blessing on higher officials only. It has treated with apathy the juniors and middle level officers.

(3) The biggest anamoly in this commission is the sudden jump when we compare 12000 scale to 14300 scale. Why is this so? Is this a error or a conspiracy?

In this hour, we should all unite and force the government to change its anti-employee policies.

-One of You

Further to the above comment from the poster

There is huge gap between salaries of PB3 and PB4 where as everyone’s salary should be increased uniformly.
So best recommendation is keep old scales and multiply it with 4 that’s all.
Old scales new scales
2550 x 4 = 10200
4000 x 4 = 16000
5000 x 4 = 20000
8000 x 4 = 32000
12000 x 4 = 48000
14300 x 4 = 57200
18000 x 4 = 72000
Everybody will appreciate it.. Yes ?? Then plz every1 send it to govt. Plz plz plz
act now before its toooooo late.....

Thursday, September 4, 2008

Armed forces want cabinet to consider pay revision

Contending that dilution of parity with the bureaucracy and paramilitary forces will hinder their operations, the armed forces want the cabinet, rather than the anomalies committee, to consider their demands over the pay panel report.The Chiefs of Staff Committee chairman and Indian Navy chief Admiral Sureesh Mehta wrote a letter to Defence minister A.K. Antony Sep 1 saying these core issues, if left unaddressed, will result in “despondency” among the armed forces.

Mehta said in the letter that the erosion of parity between the armed forces officers and their civilian and paramilitary counterparts would affect the joint operations.

“The command and control functions will be seriously hampered between army, BSF (Border Security Force) and CPMF (Central Paramilitary Forces), where infighting will jeopardize operations,” the letter says.

The reviewed report of the Sixth Pay Commission has upgraded the civilian and paramilitary counterparts of the officers of the ranks of lieutenant colonel and equivalent to the higher pay band.

Because of this, the civilian officers who were in the lower pay bracket and were hitherto drawing lesser pay than lieutenant colonels and officers of equivalent ranks would now draw a higher basic salary.

In fact, subsequent to the revised report even a short service commissioned officer in paramilitary forces will get a higher pay than most permanent commissioned officers in the armed forces.

Besides drawing a higher pay the civilian and paramilitary officials have gained ascendancy in terms of ranks on their armed forces counterparts.

As the armed forces and paramilitary forces have to work in tandem, Mehta has underscored that this lack of parity is “unacceptable” to the officers belonging to the senior services, that is the army, navy and air force.

He urged the defence minister that the relativities between the armed forces and paramilitary and bureaucracy be “immediately restored”.

Earlier, the Personnel Below Officer Ranks (PBORs) used to draw a pension in proportion to their years of service, but after the reviewed report of the finance ministry the PBORs will get pension half of their last pay drawn.

“The PBOR are put at a disadvantage as due to truncation of career they retire early and draw lesser pay relatively and hence ending up getting lesser pension,” Mehta said in the letter.

The letter is seen as the move to preempt the defence ministry’s move to send the demands of the armed forces to the finance ministry’s anomalies committee, set up to look into the grievances arising out of the pay panel’s recommendations.

Mehta has also asked for inclusion of the officers of the rank of Lt. Gen. and equivalent in the “Higher Administrative Grade Plus” category, created in all services except the armed forces. The director generals have been placed in the HAG plus category.

Earlier, Indian Air Force chief Air Chief Marshal Fali H. Major, as officiating chairman of the Chiefs of Staff Committee, had written to Antony urging him to intervene before the government implemented the pay panel recommendations.

The report of the Sixth Pay Commission, headed by Justice (retd) B.N. Srikrishna, was submitted to Finance Minister P. Chidambaram March 24.

It led to protests from both civilian and defence personnel, following which the government appointed a committee under Cabinet Secretary K. Chandrashekhar to study the various demands for financial corrections.

Govt puts payout of arrears on fast track

To expedite the payment of salary arrears to lakhs of its employees after implementation of the Sixth Pay Commission's report, the government has waived any “pre-check” of the claims they would be submitting.

This has been done to ensure that arrears are cleared at the earliest when the salary for September is paid to employees on the last working day of the month.

The employees would, however, be required to furnish an undertaking so that the government can later deduct any excess payment made to them due to any miscalculation.

Usually, the drawing and disbursement officer in a government office is supposed to verify the salary and arrear bills of every employee but the one-time exception will save the accounts section the additional burden. It will, however, work out the details of
the dues later.

After the new salaries were notified on August 29, the government came out with a detailed “ready reckoner” that took into account each earlier pay scale and the corresponding change in it.

“The calculation of new salary has become easy but some error may occur while calculating the arrears because increments are involved. It is good that the pre-check requirement has been dispensed with,” an officer said.

Although the employees will have to pay income tax on the arrears, most of them are now busy calculating their dues. Only 40% of the arrears are to be paid during the current fiscal and the remaining 60% will be disbursed in 2009-10. The employees have the option to deposit the arrears in their GPF accounts after deduction of tax. For the payment of the hiked salaries, the employees have been asked to submit a statement of fixation of pay after tallying it with the ready reckoner.

The buzz in government offices is also on a possible “anomaly” in the new scales. The pay band system, officers said, is likely to dilute the motivation for promotion because an employee's salary will, anyway, go on increasing annually.

Under the new rules, there are only four pay bands for all employees and officers with assured annual increments. As a result, a large number of employees, despite their in-cadre seniority, would be placed in the same pay band for a considerable period.

“The financial premium on promotions will certainly get diluted. We need to see what impact the new system has on the motivation levels of employees,” a director dealing with accounts said.

Incentive-based pay set to debut with science & tech department

The Union government will soon offer an incentive-based salary package for employees of some departments and allow recruitment from the private sector on contract, in line with the recommendations of the Sixth Pay Commission aimed at reforming the bureaucracy.

The department of science and technology, or DST, has already moved to put in place an incentive-based system, said a senior finance ministry official, who didn’t wish to be identified. “Once DST implements it, we expect there will be pressure on other government departments to follow suit,” this official added.
The government on 14 August accepted the Pay Commission’s recommendations, offering 5 million employees an average raise of about 21%.

According to the same finance ministry official, the cabinet has laid down that any government department was free to put in place a performance-related incentive system provided that it is “budget-neutral”, meaning the expense will have to be offset through savings in other expenditure.

The Sixth Pay Commission carried out a study through the Indian Institute of Management, Ahmedabad, on a performance-based incentive system. The study was aimed at working out a model whereby a base salary is attached to each post based on skills and responsibility; simultaneously, a second component would be payable over and above the salary on the basis of the productivity and performance of employees, either individually or as a group.

The study recommended an annual bonus of up to 20% to employees whose achievements exceed certain targets; this has been accepted by the cabinet. The government has also given in-principle approval to contractual postings in government departments of employees hired from private sector. Their pay scales and other emoluments will be decided later.
According to the official, the impact had been partially mitigated since the allowances, which are a key part of the emoluments structure, are to come into effect only from 1 September. The full impact would be realised only in the next fiscal; the official declined to share the estimates and Mint could not independently confirm the same.

For women government employees, there are some sweetners. Women employees will now receive 180 days of maternity leave as against 135 days previously. This can now be extended to two years, made up of accumulated leave; earlier this had been capped at one year.

“Another two-year childcare leave has also been granted which can be taken in parts till children reach the age limit of 18 years,” the official said. According to the official, this was the first time such a facility was being extended in government and had been modelled on what has already been adopted in Japan.

The government is also working out details to pay special allowances to paramilitary forces in line with the Rs6,000 per month allowance given to military personnel. Asked whether allowances for the paramilitary forces will be at par with the armed forces, the official said, “We would like to give an edge to the defence forces.”
The official also denied news reports that government has decided to tax 100% arrears that will be paid to government staff. The official said that as government employees will receive only 40% of arrears during the current financial year, they have to pay tax on only this amount.

Wednesday, September 3, 2008

Government clarifies, income-tax only on 40 per cent pay arrears this year

Government today said it would tax only 40 per cent of salary arrears to be paid to central government employees in the current fiscal on implementation of Sixth Pay Commission recommendations.
Generally speaking income earned in a year is taxed in that particular year, official sources said.

A section of the media today reported that the entire amount of arrears would attract tax this fiscal.

As per the notification issued by the government last month, central government employees will get 40 per cent of arrears during the current financial year and the remaining amount in the next financial year.

Government instructions issued on August 30, 2008, regarding fixation of pay and payment arrears consequent to implementation of the Sixth Central Pay Commission recommendations clearly states that in authorising the arrears income tax as due may also be deducted and credited to the government.

The arrears with effect from January 2006 would cost Rs 29,373 crore. Of the arrears, 40 per cent would be paid during the current year to the 50 lakh employees of the central government.

The revised pay scales will add Rs 4,500-5,500 crore to the government exchequer this fiscal in the form of personal income tax.

Besides, some money would also come through indirect taxes as some of the increased pay would go into buying products and services, official sources said here.

Government to tax entire salary arrears - 100% this year

For 5.5m government staff looking forward to take home the 40% of the accumulated arrears on their increased salary next month, in time for some festive spending on Diwali and Eid, here's a sad news. The government has decided to levy tax on the entire amount of arrears - even for the 60 % which will be paid next year, in the current fiscal itself.

For most employees, the decision would virtually wipe out almost the entire amount of 40% arrears to be paid to them this year. Senior bureaucrats will suffer the most as their tax would be topped with a surcharge of 10%, applicable on an income of Rs 10 lakh and above.

A senior finance ministry official said the surcharge to be paid by officers of the rank of joint secretary and above ranges between Rs 24,600 and Rs 52,500. The impact would be less on the lower grades.

Tuesday, September 2, 2008

Forces "unwilling" to implement 6th Pay Commission report

The Armed Forces have communicated to Defence Minister A K Antony that they were "unwilling to implement" the Sixth Central Pay Commission (CPC) report without "anomalies" being removed to restore their status and parity of pay scales.
"A high level delegation from the Chiefs of Staff Committee (COSC) made a presentation to Defence Minister A K Antony and top officials on anomalies, as introduced in the notified CPC report for officers, though it expressed satisfaction over the pay hikes for personnel below officer rank," Defence Ministry's top sources said here today.

After witnessing the presentation, Antony was quoted as assuring the Armed Forces that he would take up "the anomalies" with the government and get them addressed, sources said.

The presentation comes in the wake of Chairman of COSC and Navy chief Admiral Sureesh Mehta meeting Antony on Friday evening just hours before the CPC report was notified seeking to stop the government order as "the anomalies" were not removed.

When Mehta was on a visit to Japan and South Korea early last week, then acting Chairman of COSC and IAF chief Air Chief Marshal Fali Homi Major had written to Antony pointing out that the extant parities of Lieutenant Colonels and their equivalents in the Navy and Air Force were lowered by retaining them in Pay Band-3, while raising similarly placed civilian and paramilitary officers to Pay Band-4

Pay Calculator revised

The Pay Calculator has been updated to fix the revised pay at the minimum of the Pay Band and consider the increments in the existing scale. Find it at http://staffcorner.com/calc_mirror1.html

Dearness Allowance - Revised Rates.

By Sanjaysgpgi2002 - post at http://staffcorner.com/talk/viewtopic.php?f=7&t=858#p5702 (edited)

Recommendation of Sixth Central Pay Commission - Decision of Government relating to the grant of Dearness Allowance to the Central Government Servants - Revised Rates.

New rates of DA has been announced on http://india.gov.in/govt/paycommission.php (http://164.100.50.223/six_pay_comm/allowances.pdf)

From 1-1-2006 : No Dearness Allowance
From 1-7-2006 : 2% of Basic Pay and NPA, where applicable
From 1-1-2007 : 6% of Basic Pay and NPA, where applicable
From 1-7-2007 : 9% of Basic Pay and NPA, where applicable
From 1-1-2008 : 12% of Basic Pay and NPA, where applicable
From 1-7-2008 : 16% of Basic Pay and NPA, where applicable

All the allowances and pension related queries are answered.1.But what about LTC? No circular has been issued by MoF so far on revised frequency and revised entitlement of LTC for CG employees. Any idea about this? 2. What about Family Planning Allowance? No orders on this by MoF so far. I think MoF have forgotten about the above two issues. Who will remind them? All CG employees are eagerly awaiting for the revised orders in respect of the above. Hope MoF sees this site and atleast after this, they issue the above two orders in a day or two without delaying any further so that all CG employees get to know the revised rules clearly without any scope for confusion.



Unhappy with pay hike, Army wants review

The military is unhappy with the pay hike cleared recently. And the discontent is so high that over the last couple of days, all three service chiefs have met the Defence Minister to ask for a review.

The cause of worry is the morale of about 25 thousand mid-level officers.

Before the Sixth Pay Commission report, IAS officers equivalent to Majors, Lieutenant Colonels all were on same pay-scale of Rs 15,100.

But after the report, IAS officers will earn Rs 11,000 more as basic pay. Due to this, strong resentment is brewing among Majors, Lt Colonels and equivalent ranks.

Over 25,000 Majors, Lt Colonels and equivalent ranks in three services are considered the forces' cutting edge.

Earlier, at a pay scale of about Rs 15,000 Majors and Lt Colonels were at par with their IAS counterparts.

Another reason for resentment is the fact that Lt Generals, second only to the Army chief and in-charge of key fighting formations, are paid less than Director Generals.

Lt Gens who command more than 40,000 troops are kept lower than director generals of stationery, printing and equivalent who have no operational role.

Monday, September 1, 2008

Defence Ministry approves new pay scales for officers, PBORs

The Ministry of Defence, on the basis of the Sixth Central Pay Commission, has approved new pay scales and other allowances for officers as well as for the Personnel Below Officer Rank (PBOR) of the Armed forces.

The Government on October 2006 set up the Sixth Central Pay Commission (CPC) and the Commission submitted its report on March 24 this year.

The report covered among other things, matters relating to structure of emoluments, allowances and conditions of service of Armed forces personnel.

New Pay Scales of Defence Forces Officers

The Ministry of Defence has notified the new paybands along with grade-pay and Military Service Pay for Defence Forces Officers following the recommendations of the Sixth Central Pay Commission.

(in Rs.)

Post

Pay Band

Grade Pay

Military Service Pay #

Lieutenant / equivalent

15600-39100

5400

6000

Capt / equivalent

15600-39100

6100

6000

Major / equivalent

15600-39100

6600

6000

Lt. Col / equivalent

15600-39100

7600

6000

Colonel/equivalent @

37400-67000

8700

6000

Brigadier/equivalent @

37400-67000

8900

6000

Major Gen/equivalent

37400-67000

10000

Nil*

Lt Gen / equivalent

37400-67000

12000

Nil

Vice Chiefs and Army Cdr / equivalent

80000

(fixed)

Nil

Nil

Service Chiefs

90000

(fixed)

Nil

Nil

 

#          No arears on account of Military Service Pay shall be payable.

*           The element of Military Service Pay shall be taken on account for purposes of fitment at the time of promotion from Brigadier/equivalent to Major General / equivalent.

@         Colonels and Brigadiers to be placed in the Revised Pay Band IV (Rs. 37400-67000/-)

Are government salaries really low?

Though the government has formally notified the liberal pay hikes to its staff with uncharacteristic alacrity, one question remain unasked. Are government salaries as low as they are made out to be? By Shivshanker Verma

When the Pay Commission submitted its proposals to the government, it was widely expected that its implementation would be delayed because of the huge financial burden. Public finances are already under strain because of the scary rise in subsidy bills and populist programmes like the jobs guarantee and farm loan waiver schemes.

It was also expected that the government would not risk the expansionary effect of a pay hike when inflation has ben at a 13-year peak.

But the lure of earning the gratitude of millions of government workers ahead of general elections proved too irresistible to the government. Unlike most big government programmes, there was no dilly-dallying with this one.

Within months of receiving Pay  Commission recommendations, the central government heard out all those who had grievances about the proposals and worked hard to please them all. In some cases, the government even exceeded the recommendations of the commission and the period for which the wage arrears were to be paid is quite liberal to say the least.

Now, within a month of the cabinet approval, the pay hikes have been formally notified with surprising alacrity. Sadly, issues like linking government pay to performance and right-sizing the government have been ignored again and are likely to remain unaddressed for many more years.

Are central government employees really underpaid?
How many times have you listened to older government employees talking about their children's starting salaries being much higher than their own at close to their retirement? Though it may have been said with obvious pride, the message clear; that government staff in India are grossly underpaid when compared to their private sector counterparts.

This pereption is further accnetuated with media reports of  campus placement salalries of young MBA graduates every year during the campus recruitment season.

Similar reports of top management leaders in the private sector earning extraoedinarily high salaries make comparisons completely irrelevant. A newspaper report today said there are 596 executives in listed companies who earn more than Rs1 crore per year, of which 219 were new entrants to that exclusive club during the last financial year.

The number would be much higher if we include all the unlisted companies, subsidiaries of foreign companies and banks. These senior executives saw their salaries rise by as much as 36 per cent last year, when the incomes of executives below them rose no more than 10-15 per cent.

The top earner among private sector CEO's, Anil Ambani, took home more than Rs48 crore last year while his elder brother Mukesh Ambani received Rs44 crore. These sums are even larger than the entire wage bills of smaller listed companies and most government departments. 

Government staff will not earn a crore over their entire careers, even after the pay hike. It is no surprise then that most of us believe government jobs pay peanuts.

But, that is a misperception. The pay scales of government employees at the lowest levels are actually far better than those in the private sector. After the latest pay hike, the minimum salary of a central government employee will be Rs10,000 per month. Salaries for comparable functions at most private companies won't exceed Rs5,000 per month, and will be even lower if we consider smaller businesses.

When government staff demand pay hikes, they talk about entry salaries of Rs40,000 and Rs50,000 per month in the private sector. But, only engineering and management graduates recruited by top employers get that kind of money in the private sector. To be eligible for lower scale government jobs, secondary school education is often enough. When that is the case, isn't the comparison to professionals with graduate degrees from the best colleges a misplaced?

In the middle and senior levels, government pay levels do appear lower than those in the private sector. When comparisons are made, mid-career professionals in the private sector are all presumed to be earning anything above Rs20 lakh per annum. In reality, only a small percentage employed by the top companies earn that much.

The vast majority in smaller companies take home much lower salaries. Not all mid-level bureaucrats can be compared to the best paid managers in the private sector, in terms of efficiency, personal initiative, accountability and delivery of results. Some personnel in senior positions in all-India services like the IAS and IPS cadres can be compared, though not all of them, but they are eligible for a lot more perquisites than all government staff, like free housing, car and personal staff.

So, if comparisons are made after excluding the best in the middle levels of both government and private sectors, there would not be much of a difference in the average total compensation including all perks.

At the senior levels, yes there is a wide gap in pay levels. Even after the pay hike, the cabinet secretary will take home Rs90,000 per month when most CEOs of listed companies earn many multiples of that amount. The gap may not narrow significantly even after considering the market price of perks like a big house in the capital that top bureaucrats enjoy. But, the power, prestige and visibility that come with top government jobs  more than compensate for the lower salaries, as inded in most countries. US treasury secretary Henry Paulson may not earn in a year what he earned as CEO of Goldman Sachs.

At the same time, when government-owned enterprises are efficient and competitive, the employees should be paid their due. CEOs of large PSUs earn only a fraction of what their private sector counterparts make, which is unfair. The pay scales of other managers in these companies are also lower than in the private sector, though many of these companies do as well as their private competitors, because salary scales in these companies are benchmarked against comparable government jobs. The government should allow all large PSUs which meet certain performance standards, maybe all navratna companies, to pay market-determined salaries.

When they demand better pay, government staff hardly ever talks about the substantially lower working hours they put in when compared to private sector employees. Working hours of most of those working in the private sector are substantially longer than government bureaucrats. Some of the better known private sector employers may talk about work-life balance and compulsory vacations, but in practice it will be hard to find many who don't spend more time at work than officially required. 

Even if government employees decide to put in as many hours as private sector staff every day, they are usually not required to work more than 190 days a year because of the liberal leave entitlements and large number of holidays. The sixth Pay Commission's proposal to reduce the number of gazetted holidays has already been shot down.

There are two other factors that are often left out when the private-public salary comparisons are made. Government staff enjoy near absolute job security, irrespective of performance, which is hardly the case in the private sector. Then there is assured pension benefit for life for all government staff, the eligibility period for which has now been reduced to 20 years of service. Compensation comparisons should take into account the present values of pension benefits as well.

Given these, government pay levels are nowhere as inadequate as made out to be!.

Pay panel revises education allowance

The modified recommendations of the Sixth Central Pay Commission, notified by the government on Friday, also ensures a rise in the children education allowance besides an increase by 21 per cent on an average in the salaries of the government employees.
Retrospective effect

The revised salaries will reflect in next month’s pay though the report is to be implemented with retrospective effect from January 1, 2006.

The arrears would be given in cash – 40 per cent this financial year and 60 per cent in the next fiscal.
Reimbursement

According to the notification, children education allowance will be reimbursed up to maximum Rs.1,000 per child per month subject to a maximum of two children from the present Rs. 50 per child.
Hostel subsidy

Besides, hostel subsidy has been raised to the maximum limit of Rs. 3,000 per month per child from Rs. 300 currently.

Also, these reimbursements would be automatically raised by 25 per cent once dearness allowance on the revised pay bands become 50 per cent of the basic salary, the notification said.

As such, an employee getting Rs. 1,000 would get Rs. 1,250 per child per month and hostel subsidy would increase up to Rs. 3,750 when Dearness Allowance becomes 50 per cent of the basic salary.