HomeSeventh Pay CommissionPension

7th CPC Recommendations: Some glaring anomalies related to pensioners

Seventh Pay Commission: Some glaring anomalies in recommendations relating to pensioners
By KR Gupta

In the press conference held soon after presentation of the Seventh Pay Commission’s Report, Justice Shri A. K. Mathur, Chairman of the Commission, while giving highlights, had announced its recommendation of the “One Rank, One Pension” (OROP) for the Civilian employees and for the Para Military Forces. However, after going through the Report, it is seen that there is no such recommendation at all in the Report. The Commission has nowhere discussed the phraseology “one rank, one pension” in the Report.
The pension formulation recommended by the Commission is that all past pensioners shall first be fixed in the Pay Matrix being recommended by it, on the basis of the Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the matrix. This amount shall be raised, to arrive at the notional pay of the retiree, by adding the number of increments he had earned in the corresponding pay scale from which he had retired, at the rate of 3 per cent. Fifty per cent. of the amount thus obtained would be the revised pension.

It would be seen that the Commission has recommended fixation of the revised pension of the past pensioners on the basis of the pay scale, or after 31-12-2005, Pay Band and Grade Pay from which they had retired and not on the basis of the revised pay of the post from which they had retired. The concept of OROP implies that it is the rank or post held by the pensioner which determines his pension and not the pay scale. This is because in many cases the pay scales have been up-graded after the retirement of the pensioners as a result of Pay Commission’s recommendations or otherwise without any change in the rank or in the nomenclature of the post held previously by them.
The formulation proposed by the 7th CPC will not remove the existing disparity between the pension of the pre 01-01-2006 pensioners and those retiring after this date. To take an example, prior to 1-1-2006, the date from which the Sixth Pay Commission’s recommendations were implemented, the Members of the CBDT and CBEC were in the pay scale of Rs. 24050-26000. The Sixth Pay Commission had recommended the upgradation of their pay scale to the Apex Scale of Rs. 80,000 (fixed). Pending consideration of this recommendation, the government fixed their pension at Rs. 38,883 on the basis of the HAG+ scale of Rs. 75,500-80,000 which was the general replacement scale of Rs. 24050-26000. Subsequently, after considering the aforesaid recommendation, the government upgraded the pay scale for Members, CBDT and CBEC to the Apex scale of Rs. 80,000 (fixed) w.e.f. 24-12-2008. The benefit of this up graded scale was denied to the Members who had retired before this date. As a result of this, there is a disparity between the pension of pre-2006 retired Members fixed at Rs. 38,883 and the pension of Rs. 40,000 fixed for those retiring on or after 24-12-2008. This disparity has arisen due to the government stand that a past pensioner is not eligible to the benefit of a pay scale which is upgraded after his retirement, as he has not worked in that scale. Such a disparity will continue even after the implementation of the formulation recommended by the 7th CPC for the fixation of the pension of the past pensioners since their pension will be fixed on the basis of the pay scale from which they had retired and the benefit of revised scale upgraded after their retirement will not be admissible to them.
The principle of OROP implies that the uniform pension should be paid to all pensioners retiring in the same rank with the same length of service, irrespective of the date of their retirement. Since the formulation recommended by the Seventh Pay Commission will not bring about uniformity in the pension of the past pensioners retiring in the same rank on different dates, it would not be correct to say that the Commission has recommended OROP for all civil pensioners.
Another glaring anomaly relating to pensioners is in the new Pay Matrix which the Commission has proposed after dispensing with the existing system of Pay Bands and Grade Pay which was introduced on the recommendations of the Sixth Pay Commission. In the proposed Pay Matrix, in place of the existing Grade Pay, there are 18 distinct Pay Levels which would henceforth be status determiner. Each Level lays down the minimum pay, the annual pay progression of 3 per cent. and the maximum pay. It is seen that the maximum pay in each Level exceeds the minimum pay in the next higher Level. This is likely to create a situation in which a person retiring from a higher Level will receive pension less than a person retiring from a lower Level.
To take an example, A retired on 31-12-1995 in the pay scale of Rs 24,050-26,000. Before retirement, he had reached Rs. 26,000 with two increments. The corresponding revised pay scale on 01-01-2006 is Rs 75,500-80,000. As per the proposed pension fixation, his pension will be fixed in Level 16 at Rs. 1,08,950, being 50% of the revised pay of Rs. 2,17,900. Suppose, another person, B retires in Level 14 which has a pay range of Rs 1,44,200-2,18,200. If on the date of retirement he is in receipt of pay of Rs 2,18,200, his pension @ 50% of last pay will be fixed at Rs 1,09,100. Thus, A who retired at the maximum of the pay scale (which was equivalent to fixed pay of Rs 26,000 for Secretaries to the Government of India)) will draw less pension than the officer who is two levels below him.
In the case of M M P Sinha Vs. UOI (CW No. 10757 of 2010), the Patna High Court has held that a person retiring from a higher grade cannot draw less pension than a person retiring in a lower grade which grade is the Feeder grade for the higher grade. While holding this, it has relied on the Supreme Court judgment in the case of UOI Vs. S P S Vains (2008) 9 SCC 125 in which the Apex Court had deprecated the situation in which a Brigadier in the army was receiving higher pension than the Major General and to correct the anomaly the government had stepped up the pension of the Major General to show that the discrimination of a junior getting a higher pension had been removed. While suggesting the new Pay Matrix, the Commission has ignored these judicial pronouncements. If the government accepts the Pay Matrix as suggested by the Commission, there is bound to be unnecessary prolonged litigation on the subject.
Another aspect of the proposed Pay Matrix which deserves mention is that for the first time in the history of pay scale revision, the 7th CPC has recommended down grading of HAG+ scale of Rs. 75,500-80,000. In the proposed Pay Matrix, for Level 16, the maximum pay suggested is Rs. 2,24,000 which is less than the pay of Rs. 2,25,000 in Level 17 for the Secretaries to Government of India. The maximum of the HAG+ pay scale, as also of the earlier pay scales which it had replaced, has all along been the same as the fixed pay scale of secretaries to the Government of India. The Commission has not assigned any reason as to why they have made such a radical departure from the past.

It is hoped that the government will remove the anomalies discussed above while taking a decision on the Commission’s recommendation.

(KR Gupta is a former Member of CBDT )

Read at: The Economic Times

Stay connected with us via Facebook, Google+ or Email Subscription.

Subscribe to Central Government Employee News & Tools by Email [Click Here]
Follow us: Twitter [click here] | Facebook [click here] Google+ [click here]


  • Why quoting the disparity in the higher scales, you kindly give examples of the Class C and Class D employees also. All the pay commissions are concerned about the highly paid employees and the pensioners, no thought for the lowly paid employees. This mind set need change. With regards.

    • Mr NANDA you are very right.OROP is divided on this. It has divided the INDIAN ARMED FORCES. GOI is having hand in it. Gen. Retd. V.K. SINGH and govt. spoke personnel are misguiding GOI. Contry may suffer.