In a move that will benefit the nation’s pensioners in a big way, the Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved modifications in the recommendations of the 7th Central Pay Commission (CPC) relating to the method of revision of pension of pre-2016 pensioners and family pensioners.
The modified formulation of pension revision, approved by the Cabinet, will entail an additional benefit to the pensioners and an additional expenditure of close to Rs 5031 crore for 2016-17 over and above the expenditure already incurred in revision of pension as per the second formulation based on fitment factor. It will benefit over 55 lakh pre-2016 civil and defence pensioners and family pensioners.
While approving the implementation of the 7th CPC recommendations on 29th June 2016, the Cabinet had approved the changed method of pension revision recommended by the 7th CPC for pre-2016 pensioners, comprising of two alternative formulations, subject to the feasibility of the first formulation which was to be examined by the Committee.
In terms of the Cabinet decision, pensions of pre-2016 pensioners were revised as per the second formulation multiplying existing pension by a fitment factor of 2.57, though the pensioners were to be given the option of choosing the more beneficial of the two formulations as per the 7th CPC recommendations.
In order to provide the more beneficial option to the pensioners, the Cabinet has accepted the recommendations of the Committee, which has suggested a revision of pension based on information contained in the Pension Payment Order (PPO) issued to every pensioner.
The revised procedure of fixation of notional pay is more scientific, rational and implementable in all the cases. The modified formulation will be beneficial to more pensioners than the first formulation recommended by the 7th CPC, which was not found to be feasible to be implemented on account of non-availability of records in a large number of cases and was also found to be prone to several anomalies.
The Cabinet also approved the retention of percentage-based regime of disability pension implemented post 6th CPC, which the 7th CPC had recommended to be replaced by a slab-based system. The decision, which will benefit the existing and future defence pensioners, would entail an additional expenditure of approximately Rs 130 crore per annum.
It is to be noted that the benefit of the proposed modifications will be available with effect from 1st January, 2016, i.e., the date of implementation of the 7th CPC recommendations.