Cabinet DecisionsLegislation Updates

Union Cabinet has approved to release an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2020.  There will be an increase of 4 percent over the existing rate of 17 percent of the Basic Pay/Pension, to compensate for price rise.

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,510.04 crore per annum and Rs 14,595.04 crore in Financial Year 2020-21 (for a period of 14 months from January, 2020 to February, 2021). It will benefit about 48.34 lakh Central Government employees and 65.26 lakh, pensioners.

The increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.


Cabinet

[Press Release dt. 13-03-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

Armed Force Tribunal (AFT): The Bench of S.V.S. Rathore, Member (J) and Air Marshall BBP Sinha, Member (A) partially allowed a petition seeking rounding-off’ of the disability pension from 20% to 50% with effect from 01-06-2000 to 31-12-2015.

In the pertinent case, the applicant was commissioned in the Army Medical Corps (AMC) in medical category SHAPE-I on 06-06-1976 and promoted to the rank of Lieutenant Colonel. The applicant was superannuated on 31-05-2000 in the low medical category. The applicant is entitled to disability element and is in receipt of the benefit of rounding off and related arrears of his disability pension at 50% w.e.f. 01-01-2016 till date. The primary claim of the applicant is that he should also be given the benefits of rounding off and the related arrears w.e.f. 01-06-2000, i.e. w.e.f. the date of his discharge till 31-12-2015. The respondents contended that for cases of superannuation or normal retirement, the applicant has been extended the same benefit w.e.f. 01-01-2016.

The Tribunal while placing reliance on Shiv Dass v. Union of India, (2007) 9 SCC 274 held that the benefit of rounding off of disability pension should be granted to the applicant three years prior to filing of the present O.A. The O.A. was filed on 25-04-2018. Since the applicant has already received the benefit of rounding off of disability element for the period 01-01-2016 till date, he is entitled to receive the arrears for rounding off of disability element for the period from 25-04-2015 to 31-12-2015. Thus, the Tribunal partially allowed the petition.[Rameshwar Dayal v. Union of India, 2019 SCC OnLine AFT 927, Order dated 28-02-2019]

Hot Off The PressNews

The Union Cabinet approved important proposals relating to modifications in the 7th CPC (Central Pay Commission) recommendations on pay and pensionary benefits in the course of their implementation. Earlier, in June, 2016, the Cabinet had approved implementation of the recommendations with an additional financial outgo of Rs 84,933 crore for 2016-17 (including arrears for 2 months of 2015-16).

The benefit of the proposed modifications will be available with effect from 1st January, 2016, i.e., the date of implementation of 7th CPC recommendations. With the increase approved by the Cabinet, the annual pension bill alone of the Central Government is likely to be Rs. 1,76,071 crore.  Some of the important decisions of the Cabinet are mentioned below:

1. Revision of pension of pre-2016 pensioners and family pensioners

The Cabinet approved modifications in the recommendations of the 7th CPC relating to the method of revision of pension of pre-2016 pensioners and family pensioners based on suggestions made by the Committee chaired by Secretary (Pensions) constituted with the approval of the Cabinet.  The modified formulation of pension revision approved by the Cabinet will entail an additional benefit to the pensioners and an additional expenditure of approximately 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, Cabinet has accepted the recommendations of the Committee, which has suggested 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 Committee reached its findings based on an analysis of hundreds of live pension 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 implement on account of non-availability of records in a large number of cases and was also found to be prone to several anomalies.

2.Disability Pension for Defence Pensioners

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 issue of disability pension was referred to the National Anomaly Committee by the Ministry of Defence on account of the representation received from the Defence Forces to retain the slab-based system, as it would have resulted in reduction in the amount of disability pension for existing pensioners and a reduction in the amount of disability pension for future retirees when compared to percentage-based disability pension. The decision which will benefit existing and future Defence pensioners would entail an additional expenditure of approximately Rs. 130 crore per annum.

Cabinet