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Special Pay, Various Allowances and Advance: Chapter 11 & 15 of NC, JCM Memorandum to 7th CPC

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Chapter XI 

Special pay

As was defined in F.R. 9(25), the special pay system was evolved, mainly to arrest the proliferation of pay scales. In the past, it had been granted to meet the following exigencies.
1. When one is assigned duties which are arduous in nature;
2. When one is assigned duties which entail additional responsibilities.
11.2 Elsewhere in this memorandum, we have noted the need for de-layering and consequent reduction of pay scales. The reduction in the number of pay scale may bring about certain administrative problems for certain departments. The grant of special pay will take care of this difficulty. Once the duty list is recast the smooth switch over will become possible and the number of persons in special pay will gradually reduce. The recommendation of the 4th CPC to replace the special pay with special allowance has only gone to deprive the employees of the benefit of certain allowances, had it been pay. We, therefore, request the 7th CPC to bring back the system of special pay to curtail the number of pay scales.
Chapter XV.

Allowances and Advances.

15.1: Dearness allowance.
The neutralisation envisaged under the present computation of dearness compensation is supposed to be cent per cent, but in reality it is not the case. Actual consumer price index is much higher than the level at which DA is calculated on the basis of 12 monthly average. The average is always lower than the actual cost of living.
15.1.2. The calculation of consumer price index, its basis, the basket of goods on which it is based, are questionable and has become a matter of dispute. Since the Pay Commission being not the forum at which these issues could be taken, we do not propose to go into the details of this aspects.
15.1.3 We suggest, therefore, that the existing formula of computation of DA and its payment with effect from 1st January, and 1st July, may continue.
15.2: House Rent allowance.
The present scheme of HRA is based on the recommendation of the 6th CPC, which is as follows:
Population criteria classification Rate as a % of pay + Grade Pay + MSP +NPA
50 lakhs and above X 30%
50 to 5 lakhs Y 20%
Below 5 lakhs Z 10%
15.2.2. We reproduce hereunder the recommendation made by the third Central Pay Commission in the matter of grant of house rent allowance. (Para 29 Part I. Vol. IV.Chapter 56), which would be the best if implemented even today.
“While we find it difficult to accept the kind of parity suggested above, we are aware of the acute problem caused by the lack of adequate government housing and by the inadequate government housing and by the inadequacy of the existing rates of house rent allowance and recommend as follows:-
(i) Government should take houses on long lease and make residential accommodation available to its employees on payment of 10% of their pay.
(ii) Government should lay down appropriate house rent allowance rates in different cities and towns based not on population criteria, but on an actual assessment of the prevailing levels of rent in different cities and towns. Alternatively, certain notional rents for different types of accommodation meant for officers and personnel of specified pay groups should be laid down for particular cities after studying the actual conditions in that city. The difference between the actual rent paid and 10% of pay should be reimbursed subject to a maximum of the difference between the notional rent and 10% of the pay. The existing norms in regard to entitlement of accommodation, size of rooms etc. could, if necessary, be reduced depending on the housing situation and the norms usually adopted by different income groups in renting accommodation in the various cities. Such notional rents should, to start with, be applied to all stations falling under the description of classified cities for purposes of House Rent Allowance, Additions could also be made to the list later on by including other cities deserving similar treatment.
(iii) Till the Government is able to make arrangements recommended in the preceding sub-paragraphs, the rates of HRA should be as follows:”
Class of city/town Rate of HRA
A, B-1 and B-2 15% of pay subject to a maximum amount of Rs.400 as
house rent allowance.
C class 7 ½ % of pay subject to a maximum amount of Rs.200 as
house rent allowance

15.2.3. The above said recommendation is still to be acted upon by the Government and the transitory provisions suggested by them i.e. payment of allowances at a pre-determined rate on the basis of classification made of the cities depending upon the population continue to be employed. The non-implementation of the above recommendation of the third CPC , has without exception, gone to depress the wage of all sections of Central Government employees as they are perforce to spend more than what they receive as HRA for obtaining and retaining the accommodation The rates prescribed by the 6th CPC, though an improvement over its predecessor Commission, has not improved the situation. The real estate value throughout the country has skyrocketed and owning an accommodation within the city/Municipal limit has become impossible for Government employees. There is not a single town/village where the real estate boom has remained unaffected. The phenomenal increase in the value of land has naturally impacted the rent, one is to pay on leasing house/flat. The house rent allowance does not bear even a small percentage of the rent. The 7th CPC may recommend to the Government to act upon the suggestion made by the 3rd CPC without any further delay. Pending action on the part of the Government, the Commission may suggest the following rates of House Rent allowance;
X classified cities: 60%
Y classified towns 40%
Z classified/unclassified places 20%

15.3: Compensatory City allowance.

The Compensatory City allowance has been granted to Central Government employees since the First Central Pay Commission. This allowance was sanctioned to compensate for the high cost of living in bigger cities classified as such for grant of house rent allowance. Upto 3rd CPC it used to be certain percentage of pay for different pay ranges and different classified towns. The 4th and 5th CPC, however, recommended lump sum amounts as CCA. 5th CPC in para 106.10 (Pge 1582) of their report has commented that :

“We also do not support the demand for making CCA a percentage of basic pay because this amounts to admitting a firm and casual relationship between CCA and income.”

15.3.2. When it is admitted that CCA is essentially an allowance given to offset the imperfection in Dearness allowance as a measure of relative expensiveness of classified Cities, it really becomes an additional DA. When the DA is at a percentage of Pay, how can CCA not be fixed as a percentage of pay. The basis on which the lumpsum amount of CCA was recommended by the 4th and 5th CPCs had also not been disclosed and therefore, it appears to be an arbitrary decision. The 6th CPC on the other hand recognised that the only two factors viz. accommodation and transportation contribute to high cost of living in classified towns. They, recommended the revised HRA and Transport allowance to adequately compensate for relative expensiveness of the classified cities. In view of that contention, they stated that the CCA stands subsumed in Transport allowance. We are unable to agree with the idea of subsuming CCA in Transport allowance as recommended by the 6th CPC on the consideration that the relative expensiveness in bigger cities is only on account of problems of accommodation and transportation. There are various other factors due to which the expensiveness of a particular city either increases or decreases. CCA was a component in determination of overtime allowance prior to the implementation of the 6th CPC recommendations. By allowing this to be subsumed in the transport allowance, it became difficult to factor the CCA component in the computation of over time allowance.
15.3.3.For these reasons, we propose the Commission to recommend the following rates of City Compensatory allowance:
Pay Range X classified city Y classified towns.
Pay upto Rs. 50,000 10% of pay 5% of pay
Pay of more than Rs. 50000 6% of pay subject to a minimum of Rs. 5000 3% of pay subject to a minmum of Rs. 2500

15.3.4. As the relative expensiveness affects middle class employees more severely we have provided higher rates of CCA for those in the pay range upto Rs. 50,000. We have not proposed grant of DA on this allowance.

15.4: Transport allowance.

The 5th CPC had introduced transport allowance for employees working in classified towns on account of various factors like unprecedented growth of city limits, increase in volume of traffic and non availability of residential accommodation at reasonable rents near offices, which are usually located in the heart of cities. If these were the factors, it appears that the 5th CPC did not take into account that it is usually a low paid employees who finds residence at a very long distance from his office whereas officers are offered residences very near to their offices. If, therefore, transport allowance was meant to defray the transportation charges from residence to office and back, the higher rates ought to have been recommended for the low paid employees who were residing at a distant places. Since the 6th CPC’s recommendation in this regard was implemented, there had been several rounds of increase in the fuel charges making a cascading impact on the public transport fares. Taking these factors into account, we suggest that the following rates of transport allowance may please be recommended, applicable for all Government employees uniformly. There are several restrictions imposed for the grant of this allowance. One of them stipulates that the Government employees must be at his headquarters for certain number of days in a month to enable him to draw this allowance. There are organisations, where personnel by force of circumstances have to be out of Hqrs for months together. To deny them the transport allowance is to say the least salting the wound. These restrictions , we request the commission to recommend to the Government to be removed..
Pay Range X classified city Other places.
Pay upto Rs. 75,000 Rs. 7500 + DA Rs. 3750 +DA

15.5: Deputation duty allowance.

In our memorandum submitted to the 6th Central Pay Commission, we had pleaded for doubling the Deputation (Duty) allowance. Our plea in this regard was not accepted by the 6th CPC.
Presently the rate of the allowance is 5% when one is drafted for deputation in the same city and 10% if posted outside. In quite a number of Departments of Government of India, there is need for taking personnel on deputation to ensure that certain specialised jobs are carried out efficiently as it could not be undertaken by the in-house talent. The personnel will volunteer for deputation only when it is found to be financially lucrative. The present rates are not so and quite a number of ex-cadre posts are reported to be lying vacant. We, therefore, request that the 7th CPC may recommend to double the rate of Deputation duty allowance i.e. 10% of pay when posted in the same station and 20% when posted outside.

15.6: Travelling Allowance and T A on transfer

15.6.1 The travel entitlement while on tour or transfer as recommended by the V CPC are as under
Pay Range Travel Entitlements
For Post in the grade pay of Rs.9000 and
J Class by air / AC First Class by train
For post carrying grade pay from Rs.6600-to Rs.8400 Y Class by air / AC First Class by train
For post carrying grade pay from Rs.5400-
to Rs.6500
Y Class by air / AC II Tier Class by train
For post carrying grade pay from Rs.4200-
to Rs.4800
AC II Tier Class by train
For post carrying grade pay of less than
First Class /AC III Tier / AC Chair car by

15.6.2. Daily allowance.

The entitlement for accommodation, taxi charges and food bills as recommended by the 6th CPC are as under:
Grade Pay Daily Allowance
Rs.9000 and above Reimbursement for Hotel accommodation of upto Rs.5000 per day ; reimbursement of A/c taxi charges of upto 50 Kms. for travel within the city and reimbursement of food bills not exceeding Rs.500 per day
Rs.6600 to Rs.8400 Reimbursement for Hotel accommodation of upto Rs.3000 per day ; reimbursement of non-A/c taxi charges of upto 50 Kms. Per diem for travel within the city and reimbursement of food bills not exceeding Rs.300 per day
Rs.5400 to Rs.6500 Reimbursement for Hotel accommodation of upto Rs.1500 per day ; reimbursement of taxi charges of upto Rs. 150 per diem for travel within the city and reimbursement of food bills not exceeding Rs.200 per day
Rs.4200 to 4800 Reimbursement for Hotel accommodation of upto Rs.500 per day ; reimbursement of taxi charges of upto Rs. 100 per diem for travel within the city and reimbursement of food bills not exceeding Rs.150 per day
Below Rs.4200 Reimbursement for Hotel accommodation of upto Rs.300 per day ; reimbursement of taxi charges of upto Rs. 50 per diem for travel within the city and reimbursement of food bills not exceeding Rs.100 per day
15.6. 3. We have proposed Time Scale of Pay Structure in our Memorandum in replacement of Pay Band and Grade Pay. In view of the same, we propose that all persons belonging to Executive Class may be extended I class by air/ AC First Class by train and all non executive Y class by Air/AC II tier class by train. 
15.6.4. This scheme of reimbursement of charges has led to persons indulging in undesirable corrupt practices. Inflated hotel receipts, food bills etc., have been presented by many including highly placed officials. We think providing a composite rate of daily allowance to take care of accommodation internal travel charges and food bill would be a proper. We, therefore propose these rates may be as under:-
Category A1 and A class city Other cities
Executives Rs.5000/-per day +DA Rs.3500/- per day + DA
Non- Executives Rs.4000/-per day +DA Rs.2500/- per day + DA

15.6.5.Travelling Allowance on Transfer

We agree that composite Transfer Grant equal to one month Pay + DA alongwith actual fare for self and family as per the entitled class may continue. As regards transportation charges of personal effects we propose the following:-
Class By Train/Steamer Rate per Km for transport by Road
Executive Class 6000 Kgs by goods train / 14 wheeler wagon/1single container. Rs.50 +DA (Re.1/- per Kg per Km)
Non Executive Class 3000 Kgs Rs.50 +DA (Re.1/- per Kg per Km)

15.7.Children Education Allowance

The Children Education allowance was introduced w.e.f. 1-9-2008 on the basis of the recommendation of 6th CPC. In the background of escalation of school fees, and other expenses connected with education of Children, the present scheme has been a big relief for the Government employees. Presently the allowance is admissible for two children, for studying in a recognised school upto XII standard. The maximum ceiling is stipulated at Rs.18000/- since this allowance had been hiked by 50% because of the DA component in salary having been crossed 100% on 1.1.2014. We suggest doubling of this allowance and increasing the same by 50 % whenever the DA reaches 50%.

15.7.2 The insistence of receipt for each and every expense to claim the allowance is a cumbersome procedure, which serves no purpose at all. In order to avoid a probable misuse, the employee may be asked to produce an affidavit to the effect the child/children were bonafide student of the school. . In the case of hostel subsidy also, the procedure is irksome and serves no purpose at all except that the concerned employee could be harassed. The insistence of receipt etc. in that case also be dispensed with. In both the cases, a certificate from the concerned school authorities that the child is either a bona fide student or an inmate in the hostel must be treated as sufficient to grant the allowance.
15.7.3. We also suggest that the scheme may be extended to cover any two children studying for Graduate/Post Graduate and Professional courses. This suggestion is being made in view of the huge expenses involved for the children’s higher studies, especially in the background of the
Government withdrawing itself from the higher education sector and allowing private institutions to come up and extract exorbitant charges for various courses.
15.7.4. Education Advance: Presently the employees are to depend upon the Banks for education loans. Banks levy interest on these loans very heavily. If the child is not able to get an
employment immediately after his studies, it become an unbearable burden on the employee. We, therefore, suggest that the 7th CPC may recommend to the Government for the sanction of Education Advances with an interest rate not exceeding 5% for those employees, whose children take up higher studies.
15.7.5 . We request our suggestion in the matter may be recommended to the Government for its acceptance.

15.8.Overtime allowance.

Overtime Allowance is seldom granted to the Government employees. Only in case of emergency and in the contingency in which the work cannot be postponed, the over time allowance is entitled to.
15.8.2 The third, Fourth, Fifth and Sixth Central Pay Commissions had recommended for the discontinuance of Over Time Allowance except in the case of Industrial employees, Staff Car drivers, and operational staff. However the Government continued to pay over time allowance calculated on the basis of notional pay in the pre-revised basic pay of IV Central Pay Commission
15.8.3. The matter was referred to the Board of Arbitration in C. A. Reference No. 2 of 2004 on 06.09.2005, The award was given in favour of the employees to the effect that overtime allowance shall be calculated on the basis of actual pay in the Fifth CPC revised Pay scales. This award has not been implemented so far. The result is that Rs 15.85 per hour which is 10 times lesser than the rate fixed in Railways and Defence is being paid in Postal and other Departments.
15.8.4. We propose that over time allowance should continue to the paid and calculated on the basis of actual pay, DA and Transport Allowance from time to time. The rate of overtime Allowance should be refixed as and when the DA is increased and there shall be no ceiling on amount of overtime allowance which become payable. Overtime allowance is denied to the personnel on the plea that their pay is beyond the stipulated level for grant of overtime allowance. If that be the case, they must not be asked to work beyond the stipulated working hours. However, we are aware that such a stipulation cannot be made in the case of operational organisations. We, therefore, suggest that the overtime allowance must be granted to all personnel, if he/she is asked to work beyond working hours, irrespective of limitation of emoluments.

15.9.Night duty allowance.

The Nigh Duty Allowance as granted now is very meagre and require revision. It is pertinent to mention that considering the changes in the payment of Dearness Allowance and price escalation, the Ministry of Railways has revised the allowance from Rs. 57.90 to Rs. 203.20.
15.9.2. Though the V CPC recommended that the relaxation of the ceiling for Night Duty allowance be restricted to certain categories of Railways, the Board of Arbitration has given a categorical award that the ceiling of Rs. 2200 (with reference to IV CPC) may be lifted in all cases.
15.9.3. We therefore request this Commission to do away with ceiling of Pay for all .
15.9.4. The Govt. had not revised the rate of Night Duty Allowance on the basis of revised pay both while implementing the recommendations of the IV, V, VI Pay Commissions. The Board of Arbitration has also given award that NDA should be calculated on the basis of current rates of pay including DA & CCA.
15.9.5.We therefore, urge upon the VII CPC to recommend that rates of NDA for all should be computed on the basis of revised pay recommended by VI CPC and it should be reviewed annually in order to include the DA Admissible.

15.10. Patient care/hospital care allowance.

Patient/hospital care allowance is presently granted as a lumpsum amount. This is an allowance, which is hiked by 25% as and when the DA entitlement crosses over 50%. We suggest that the lump sum amount may be doubled and the rates made uniform in respect of all employees of all Central Government hospitals and Dispensaries. Presently Night duty allowance is denied when the Patient care allowance is granted. In other words, the two allowances are not concurrently granted. This is an unjust stipulation in as much as Night Duty allowance is granted when one is asked to perform duty during night. The stipulation may, therefore, be removed. We request that our suggestion in this matter may be accepted and recommended.

15.11.Additional Monetary Incentive for Personnel Posted in N E Region

In consideration of the peculiar situation prevailing in the North Eastern States i.e insurgency, high cost of living, inaccessibility etc., the staff side in the National Council raised the demand for a special allowance to be granted to employees posted in North Eastern States. The Government agreed to set up a committee to look into the grievances. The committee suggested for grant of such an allowance. However, when the Government issued orders, the allowance was in fact granted only to those personnel with an all India transfer liability or only for Officers in Group A services. The said decision generated resentment amongst the other segment of employees. The North Easter region witnessed tumultuous agitations. Some employees approached the Court and obtained favourable orders. But the Government refused to implement those court orders for similarly placed employees.
15.11.2. The matter was brought before the 6th CPC. The 6th CPC recommended extension of the said benefit to all sections of the employees. Ultimately the Government issued orders to cover all employees with the special duty allowance in 2008 by which all personnel posted in N E Region become entitled for special duty allowance at 12.5%.
On 10th February, 2009, the Government suo moto issued an O.M (F.No.14017/4/2005 AIS(11) according to which an additional monetary incentive to officers belonging to North East Cadres of the All India Services @ 25% of their basic pay + Grade Pay was granted. The additional monetary incentive was given the nomenclature “Special allowance for Officers belonging to North East Cadres of All India Services”. If the grant of the allowance is justified on the ground of remoteness, arduous environment, endemic insurgency etc, how then it could be denied to the employees who are to face the same situation throughout their service career. The order is discriminatory and repetition of the efforts of DOPT while granting SDA earlier, which had to be rescinded on the recommendation of 6th CPC. We request the 7th CPC to recommend that in the light of the above cited order dated 10-2-2009 the employees may be granted Special Duty Allowance @ 37 ½ % of pay.

15.12.Other Allowances/ Advances

We suggest to the VII CPC to recommend to increase the following allowances and advances, which are presently granted as a lump sum amount to three times in vew of the fact that the revised Minimum wage computed is almost 3.7 time of the emoluments as on 1.1.2014.

Conveyance Allowance
Risk Allowance
Project Allowance
Washing Allowance
Child Care Allowance
Cash Handling Allowance

All other allowances not listed above.

Natural Calamity Advance
Vehicle Advance
Personal Computer Advance
Uniform and Stitching Charges
All other Advances

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