Central government salaries to go up by 21 per cent news
16 August 2008

Mumbai: The central government has approved an average 21 per cent rise in o pay for its over 4.5 million employees as also defence personnel.

The pay hike, effective from 1 January 2006, would cost the exchequer around 15,000 crore  ($3.6 billion) this fiscal, including part of the arrears from 2006, P Chidambaram, finance minister, said.

The Indian Railways will also effect a similar pay hike, involving an expenditure of of Rs6,000 crore to its employees.

The pay rise comes at a time of concern about rising inflation, which was reported on Thursday to have hit a 13-year high of 12.4 per cent for the 12 months to the beginning of August.

The move also comes just a day after the prime minister's Economic Advisory Council warned that the government's fiscal situation ''no longer looks stable or sustainable'' as a result of the growing subsidy bill.

The revised pay scales will come into effect from 1 January 2006 and the rates of allowances from 1 September 2008. The arrears will be paid in cash in two installments 40 per cent during the current year (2008-09) and the remaining 60 per cent in the next financial year (2009-10).

The salient features are:

The government has made some modifications in the wake of representations received from various sections/associations of central government employees. The new system of four pay bands with 20 grade pays recommended by the commission has been accepted with some minor modifications.

The minimum basic pay for a government employee has been increased to Rs7,000 from Rs6,660 recommended by the pay commission. The total emoluments of an employee at the lowest level will hence exceed Rs10,000 pm, including allowances.

For the defence forces, the new pay scales have been based on a multiplication factor of 1.74 to 1.86. This would result in increased wages for them.

Enhancement in the fitments in revised pay bands would result in increased emoluments for employees.

Annual increments will go up to three per cent from 2.5 per cent earlier.

Besides, transport allowance at the lowest level have been raised to Rs600 (from Rs400) in A-1/A class cities and to Rs400 (from Rs300) in other cities. The campus restriction for grant of transport allowance has also been done away with.

At least three promotions have been assured for all Defence Forces' personnel and civilian employees under the modified assured career progression (ACP) scheme. While the civilians would get it after 10, 20 and 30 years of service, the defence personnel would get ACP in 8, 16 and 24 years.

For the armed forces personnel, there would now be a Military Service Pay (MSP) and this has been raised to Rs2,000 PBORs from Rs1,000 recommended by the pay commission. The officers of the defence forces would get an MSP of Rs6,000 over and above their pay.

The middle level officers like colonels and brigadiers have been placed in the highest pay band of PB-4.

Senior Lt. Generals overlooked for promotion as army commanders due to lack of residual service would now get the grade of army commander (Secretary's grade). In the case of existing Major Generals/Lt Generals, MSP will be taken into account notionally for fixation of pay on 1 January 2006.

As replacement of the pay scale of Rs24,050-26,000, a separate pay scale has been carved for DGPs, PCCFs, GM (Railways), members of the boards of income tax, customs & central excise, postal and ordnance factories, among others, who were in this pre-revised scale. This would take them to the level of Rs80,000 in two years as against three years in the pre-revised scale

Further, the IPS pay rules and the Indian Forest Service pay rules will be appropriately modified to provide in each state cadre one post of DGP and one post of PCCF at the apex level of Rs80,000 for heading their respective forces.

Middle level police and civilian officers like DIGs, conservator of forests, scientists E & F, superintending engineers, directors, additional commissioners of income tax and central excise and posts in equivalent grades have also been placed in PB-4.

Also, the lower limits of disability pension for defence personnel has been doubled from Rs1,550 to Rs3,100. War disability pension to be granted at 60 per cent.

The rates of special forces allowance for Army and Air Force will be equated with Navy's Marine Commando Allowance.

For the officers of Central Para Military Forces, all the posts of Additional DIG upgraded to DIG level by the pay commission will continue to be manned by the cadre officers of CPMFs.

For the Railway employees who are in receipt of running allowance, this will be taken into account while fixing their pay in revised pay bands.

Government has continued the present position of granting Group A scale to Group B officers after 4 years of service and these officers would be placed in PB-3 instead of PB-2 recommended by the pay commission. This would benefit Group B officers of the Railways, accounts services, CSS, CSSS and DANICS & DANIPS.

For doctors, the cabinet has approved promotions under the dynamic ACP scheme up to senior administrative grade (joint secretary level) for doctors with 20 years of service. Calculation of dearness allowance (DA) on non-practicing allowance (NPA) as of 1 January 2006 for fixing their pay in revised pay bands has also been approved.

For the scientists, continuation of the existing system of grant of special pay of Rs2,000 pm to scientists G on promotion and doubling of the amount to Rs4,000 pm in Department of Space and Atomic Energy and Defence Research & Development Organisation (DRDO) has been recommended.

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Central government salaries to go up by 21 per cent