Bonanza for Central Govt staff

Sorry......., this is not the latest news !  Let's  hope we'll  read such a news .... may be by early 2016 !!
But what I wanted now is to remind you of how the newspapers reported on 6CPC recommendations !!  Given below is a copy from The Hindu dated 25 March, 2008.

6CPC and Indian economy

Did you think that the implementation of 6CPC recommendations have drained Government money ? Affected our economy badly ? Then it's the other way.
A recent report on economic growth says that 6CPC had helped Indian economy from a steep fall. The current projection 5.3% GDP growth (against 7.6 % in the previous quarter) is below the most conservative projections. But there are a few signs of improvement.
The fall in growth would have been worse, but 6CPC gave a boost to public consumption (upto 24.6 % ), offsetting the deceleration in private consumption.

6CPC - Every pensioner has a complaint

6CPC - Every pensioner complains ...
Here are a few points (personal view) on the 6CPC implementation of Retirement/ Pensionary benefits. I invite your comments.

1. Revised Pension - Anomalies
Unlike earlier Pay Commissions, the 6CPC has introduced the concept of ‘Pay Band’ and ‘Grade Pay’. By this, a group of scales are bunched and a common pay scale is introduced. ‘Grade Pay’ differentiates the various categories in the PayBand.
Pension is computed and paid to a retiree on the basis of his average pay of the last 10 months. On revision of pay by 6CPC, an earlier pensioner (pre 2006) is given a pension (not less than) 50% of the pay at the lowest level of the revised pay scale. Thus the pension of a person with many (even more than10-15 ) years of experience also is equated to that of a new entrant by this process.
Pension is the right of a Govt employee, by virtue of his service. Irrational reduction by any law is discriminatory. It would be a basic justice, that the pension may be computed on the basis of the last drawn salary equated to the new scale as is done for fixing the pay of a current employee. This would be a justice as his service period will get duly accounted for the pension amount.
A close look at any specific case would reveal that the difference in pension for a retiree on 31-12-2005 and that on 1-1-2006 (just over a day) is as high as 20%. The discrepancies in the revised pension needs to be resolved. This injustice would demand a relook and appropriate normalization.

2. Pension fixation - Anomalies

The Pay Band principle brings in many anomalies of pension fixation. “ 50% of the pay at the minimum of the scale in the PayBand” brings in a lot of injustice and anomalies too. By the order of the pension cell, the pension has been reduced in many cases (by even 20 %), which is a blatant violation of equity. Hence the order of the pension cell should be modified to derive the intended benefit to the pensioner.

3. Gratuity.
Gratuity is a one time payment given to a retiring employee, intended to help him build a retired life. The amount of this payment has been fixed, on various considerations, by the Government (and Pay Commissions). The absolute value of this payment has not been protected against inflation or any other rising indexes over time. Thus a person retiring in 1996 gets a Gratuity of Rs.3.5 Lakhs, and the same level is retained to those retiring even on 31-12-2005. At the same time, it is evident that the salaries in 2005 is over two times that in 1996, and the cost of living and price indexes have increased multifold. Government did not revise this progressively over the years, to accommodate this variation in pay and burdens. This results in an unjustified disparity among the employees retiring over the years. Justice would certainly be that the gratuity be calculated on the basis of the real value ie. by accounting for the cost of living and other rising economic indexes, and thereby adjusting the value of 3.5 Lakhs.
6CPC has raised the Gratuity to Rs. 10.0 Lakhs, but only to those retiring after 1 Jan 2006. This also is clearly a denial of justice to the pre-2006 retirees. A workable solution would be to use a tapering formula to compute the amount of Gratuity. ie. Tapering from Rs.3.5 L in 1996 to 10.0 L in 2006. The heavy losses, thus born by the pre-2006 retirees, should be normalized, by paying the difference on a tapering formula. That would assist the pre-2006 retirees to build their peaceful retired life.

4. House Rent Allowance.
The drastic increase in house rent, across the country, has made it impossible to hire a modest living place even in relatively less costly places. The 6CPC has recommended a decent higher rent on the revised scale to all employees across all places in the country. Pensioners have been thrown to great hardships due to increased rent on one hand and increasing medical care costs on the other. The DA increases from time to time, however, does not match or suffice the high rising rent and medical burden. Hence, it would be but justice, that house rent relief should be provided to pensioners also.

5. Commutation of Revised Pension.
Commutation of pension (with a max of 40% of basic pension) is an opportunity offered to the retirees to get a bulk of money on retirement. This helps him to invest for setting up his retired life, or invest in an opportunity that would get him better returns for maintenance of his life. A pre-2006 retiree, who had commuted his (pre-revised) pension, got a small amount of money. Whereas, a post-2005 retiree, on his revised higher pension, would be getting a higher (handsome) amount. The pre-2006 pensioners are deprived of this opportunity. It would be a great help, if the pre-2006 pensioners are allowed to commute on his revised pension now. The bulk amount (though small) would still help him invest in better opportunities, or meeting important family needs. It is requested that the pre-2006 retirees are offered this facility to commute 40% on his revised pension (less amount commuted earlier).

6CPC : Anomaly Committee

A press report :

"The Government has decided to set up an ANOMALY COMMITTEE to settle disputes arising out of implementation of the SIXTH CENTRAL PAY COMMISSION recommendations. It will receive representations on anomalies up to six months from the date of its constitution and will dispose off them within an year.
"

Thank GOD, and let's see what happens !

6CPC : Justice denied

I have here, an article by Sri. R. Sundaram, appeared in the Hindu-Business Line, sometime back. This is taken from their site :
http://www.thehindubusinessline.com/2007/02/17/stories/2007021700370800.htm

"
Les Miserables

Among the middle-class senior citizens there are three kinds of retirees. Those who retired from government service or organisations with similar terminal benefits, those who retired with provident funds to which the employers also contributed, and those without either of these advantages. The latter two quite often envy, mostly without malice, the good fortune of government pensioners, as these worthies enjoy a steadily rising compensation long after they have stopped working.
They wonder aloud how former government servants sometimes get pensions far higher than their emoluments at retirement. The envious can relax now. The good days seem to be over for previous generations of government employees. Recent decisions from the highest in the government and judicial forums have succeeded in eroding the confidence of senior government pensioners.
Now they may feel wretched at not having had the foresight to build a sizeable nest-egg by hook or by crook, needing to depend, instead, on the steady income from guaranteed parity of pension with juniors, particularly after the judgment in D.S. Nakara vs Union of India.
This landmark judgement established unmistakably the principle of equality under Article 14 of the Constitution between those who retired before and on, or after the effective date of implementation of the Pay Commission's recommendations.
It may be recalled that the Supreme Court observed in the Nakara case that "pension is neither a bounty, nor a matter of grace depending upon the sweet will of the employer, nor an ex-gratia payment. It is a payment for the past services rendered. It is a social welfare measure rendering socio-economic justice to those who in the heyday of their life ceaselessly toiled for the employer on an assurance that in their old age they would not be left in the lurch."
However, in a 2005 judgment on equal treatment in the matter of Death-Cum-Retirement Gratuity for those who retired before and after January 1, 1996, the same court observed that: "We are afraid that the refrain of D. S. Nakara (supra) has been played too often to retain its initial charm, which has been worn thin by subsequent dicta".
The unexceptionable principal of the Nakara case was that there should not be two classes of pensioners who retired from the same post by drawing a cut-off line and granting the revised higher benefits to those who retired on or after the cut-off date. It appears that the judiciary, nudged by the establishment, has during the last few years been able to chip away at the security edifice built carefully during the 1980s.
In a recent judgment relating to the case of those who retired from important field posts in the Railways, this principle has been negated by contending that the principle established in the Nakara case need "not be interpreted to mean that emoluments of persons who retired before a notified date holding the same status must be treated to be the same". Not only is a `class within a class' thus sought to be created, the pre-1996 retirees, who are all above 70, are left with a sense of great hurt and deprivation, if not betrayal.
Perversely though, retirees in their sixties today may be having a good night's rest now, but they too will join the ranks of Les Miserables with the implementation of the Sixth Pay Commission, which is now a work in progress.

R. Sundaram

"
I am sure, even after 6CPC implementation, the discrimination is not resolved. The gap widens in more than one dimensions. Not alone in financial terms, but also in social terms. Creating classes (by discriminatory practices by the authorities) is certainly not justifiable.
The discrimination is not alone in pension, but also in the retirement benefits. I had pointed out in my earlier posts that, a person retiring on 1 Jan 2006 gets much higher retirement benefits than his colleague (on equal position and pay) who retires on 31 Dec 2005. This is certainly not justice. Both of them burnt their life in service equally.

6CPC : Discreminatory treatment by Government

Today, I've here a short text which I (on my personal behalf ) continue to communicate to the media, and individuals. If you have any comments, kindly communicate to me at : iscf.tvm@gmail.com

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6CPC and pre-2006 retirees

The Sixth Central Pay Commission has been very cruel to the pre-2006 retirees, while being very generous to the Central Government Employees and retirees (post 2005).

The retirement benefits (pension commutation, leave salary, and gratuity) given to a retiring employee is meant to build a ‘retired life’ for him and his family. The pension provides for the maintenance of his and his family’s for the rest of the life. These benefits are awarded for spending all the retiree’s life serving the Government and society. In fact, this is a contractual obligation on the part of the society and government, as a return for his service during his lifetime.

The 6CPC, has certainly looked at this and have accordingly raised the terminal benefits and pension, of all categories of retirees. However, the treatment has not been fair, equal, and or logical. Unfortunately, the 6CPC and the Government made a huge division among the employees, on the basis of a ‘date’. The date is only an administrative (technical) one only. It’s no way justifiable. This is injustice.

I have retired in the month of December 2005, after spending 33 years of my life, serving the Nation. The 6CPC and now the Government treats me bad, as far as the retirement benefits and pension are concerned.

The 6CPC guidelines specify that I am not qualified for the revised retirement benefits as announced by them, on the reason that I retired in pre-2006. I am eligible only for a small increase in my monthly pension, on the principle of ‘one rank one pension’.

The injustice in treating the pre-2006 retirees would be evident from the following example.

The retirement benefits of two persons of the same position, service and pay ( one retired in Dec 2005 and the other on Jan 2006) are different to a very great an uncomparable extend. My colleague who retired in Jan 2006 got 10 Lakhs as his gratuity, while I got (retired in Dec 2006) a mere 3.5 Lakhs. The difference is too large for all other elements (the pension, pension commutation, and leave salary payment). This is certainly injustice. This should be almost equal ( atleast comparable) in the amount of terminal benefits and subsequent monthly pension. That’s natural justice, I believe.

Had I retired on the next day, 1 January 2006, things would have been very different. I would have got the new terms of retirement, which is far higher than those applicable for 31 December 2005. A day makes so much of difference. The difference is so large that I feel very miserable, when I think of this ONE DAY. This day, 31 December 2005, is so dreaded for me now ! Everyone who retired around that period – in 2005 - feel so bad, just over a few day’s or week’s difference.

6CPC and the Government has not looked at the implementation in this angle. This is very cruel and injustice. The Government should take immediate steps to normalize this huge disparity caused by that milestone day. Please remember that this day is only just a technical one and nothing (cost of living or anything else ) have changed on this day. The improved retirement benefits and pension should be applicable to all those retired earlier too (pre 2006). The applicability of the benefits may be made in a reasonable and justifiable formula. A tapering formula (eg. 10% less for every year preceding 2006 ) may be reasonable. eg. For persons retired in 2005, the benefits may be 90% of what a person retiring on Jan 2006 gets. This would bring in justice to those unfortunate pre-2006 pensioners.

I request ALL to project this issue to the public and the Governmrnt, for settlement of this injustice, and do a normalization of terminal benefits and pension among all employees and pensioners. When “One rank one Pension” is the right norm, similar should be the treatment on all other benefits too. The technicality of ‘the day’ should not be a block for implementing justice to all employees. Normalisation of all kinds of benefits, in a reasonable and justifiable format, should be immediately taken up by the Government.

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The great divide and Injustice

The great divide and the denial of justice.
Our society gets divided on many forms and accounts. The poor and the rich, the literate and the illiterate, abled and the disabled, … and the list of ‘divide’ is very long. Divisions of all sorts. There is a continuous effort by our ‘masters of the society” to eradicate such divides, and bring in equality and justice. While many such divisions are still prevalent in our society, divisions of many more are being created. New divisions happen (or created) on many frontiers of our society and life. New cases of “ ‘have’s and ‘have not’s “ are still being created (not just happens).
One such division, recently created, is among the Central Govt employees and the pensioners. The Sixth Central Pay Commission ( headed by Justice Sreekrishna) is the creator of this divide. The Government, however, has vetted the division. However, this not being a 'major issue' for the politicians, has not surfaced out appropriately.

The division, concerning the Central Govt employees (both present and former), is not affecting the present employees (gainers), but affects the former employees (pensioners) who are the losers. This divide is certainly a painful one for the pensioners, a very small fraction of our society.
Though the present employees are ‘over-joyed’ over the 6CPC recommendations and its implementation (with more icing by the Government ), some of the pensioners are very sad about it (although there is an increase in the monthly pension). The reason for this divide is a discrimination towards the pensioners, based on a date.

1 January 2006, the effective date of implementation of the 6CPC recommendations, is the unfortunate day for many of the pensioners. The division is among employees retired on or before 31-12-2005 and the employees retired or serving on or after 1-1-2006. The midnight on 31 Dec 2005 is the “Berlin wall” for these two “Classes of employees”. Retirees on or before 31-12-2005 are the have-nots, while all others are haves.
In one of my earlier posts, I brought an example of the division. To remind you of the ‘great difference’, look at the following. There’s many unjustifiable differences, and I am quoting only just one among them

A person retiring on 31-12-2005 gets an amount of 3.5 Lakhs (max) as the Gratuity. But, a person retiring on the next day (ie. 1-1-2006) walks away happily with 10 Lakhs. I am sure that the 6CPC and the Govt authorities understand very well that the amount of Gratuity is a lumpsum amount paid to the retired person (as a gratitude !) for making a settlement/ base for his retired (old age) life. Thanks to our system, for giving a monthly pension for the maintenance of the retired’s old age life (though inadequate to maintain the life standards ). The person leaving on 31-12-2005 settles his life with 3.5, and the other person leaving after the midnight of that day settles with 10 Lakhs. The difference is 3 times ! This is certainly a great divide and is not justifiable.

Central Govt rules stipulate (that’s what I understand) that a Commission be appointed for review of the pay and related aspects of the Central Govt employees, once in 10 years. Since the 5th PC recommendations were made effective on 1-1-1996, the 6CPC made 1-1-2006 as its “effective date” for implementation. That’s fine, but that’s not meant to be the base for a justifiable structure of pay and related matters. Cost of living or any other economic parameter did not jump 3 times on that ‘sacred’ day.
A revision of pay structure (as seen now) can be created by any babu at the Central secretariat. But, that’s not what was expected of the Commission, its Chairman, and the Govt. The Commission was expected to consider the issue and requirements in its global nature and on a 360deg perspective. Had it been on such an angle, a more equitable and justifiable outcome would have come. I think, the Commission had an easy task, by taking it too easy. Was the objective of the task only to frame new scales of pay for the present employees ? Only to make them happy ? Or to compute on a multiplication factor to compute a slightly higher Pension?

On the implementation front, the Govt authorities haven’t put their mind into the social implications of implementing such recommendations. Probably, they did only a mathematical exercise to compute the total financial burden on the national exchequer.
6CPC and the Govt authorities, I wish, should have had a more logical look at the social aspects of the implementation of the 6CPC recommendations.

What I am pointing out here is only an element of the discriminatory nature of the 6PC aspects. Many more things are in the field. This is evident from the fact that our Armed Forces have NOT accepted the implementation of these recommendations. This too reinforces the fact that Justice Sreekrishna did not do justice to many. This includes our Armed Forces and the poor pensioners.

In my view, the above ‘sacred day’ – 1 Jan 2006 – has no relevance at all. It did the division, and that’s all. This is not justifiable. Why should all the things be applicable from this sacred day only ? What’s wrong if it had a backward date and applicability. This doesn’t mean that I am suggesting for my convenient date for applicability/ implementation. Let the date of implementation be 1 Jan 2006. But it’s applicability, in a proper format, be made applicable in an equitable format for all. To suggest an example, in the case of the Gratuity, let a formula be made with backward applicability (for the last 10 years). Let the pensioners (before 1-1-06) get a modified Gratuity = 10 lakhs minus ((2006 minus year of retirement) X 10% of 10 lakhs). {This is backwardly tapering down at 10% per year, for 10 years }. Though this would be a very late payment, it would bring in some relief to all. In the case of Commutation of pension too, there’s a big discrimination. That too should be appropriately worked out (on such a tapering backward principle) and justified.
I agree that there would be an additional load on the Govt budget, but that's too small for the Govt to bear. Remember, the Govt could easily write off 75,000 crores towards the agricultural loans (which in fact did not reach the real suffering farmers ). Many more crores have been pumped recently into the stock market system, in an effort to save a minor fraction of our population. The additional burden that would bring in by implementing a backward tapering formula, for the pensioners, is not a burden at all, for the Govt. In fact that would be a case of justice done.
My attempt here is not to say that 6CPC and the Govt did all bad and lunders. They did excellent work and recommendations on many aspects. To cite an example, Govt implemented the ‘One Rank One Pension” principle. By the way, this is an excellent case of doing some justice to all the pensioners.

My attempt here is to invite the attention of ALL related personnel and the Govt to relook into the ‘unjustified’ aspects of this issue.

Will someone put their thoughts on this ? I hope some one does.. the authorities.. the guards of our society …. . and resolve the unjustifiable divisions.

May God Bless all.

Unfortunate pensioners - just over a day's difference

What happened on 31 December 2005 ? Yeah.. something very important has happened. 1 January 2006 was all the way different from its previous day... Atleast for all Central Government employees.

Being an employee on 1 Jan 2006 makes a lot of difference from having been an employee on or before 31 Dec 2005 ( and not being an employee on 1Jan 2006).

Let me put here, my personal views, on the 'injustice' implemented by our Government.

"

The Sixth Central Pay Commission has been so generous to the Central Government Employees. But, equally too, they are so cruel to some of the pensioners.

The retirement benefits ( the amount of money, lumpsum) given to a retiring employee is meant to build a ‘retired life’ for him and his family. The pension is for the maintenance of his and his family’s life. These are the benefits obtained for burning their lives (the whole life) for the Government (society).

An employee retired on 31 December 2005 is not qualified for the retirement benefits as announced by 6CPC (although there is a very small increase in the monthly pension, on the principle of ‘one rank one pension’). Had he retired on the next day, 1 January 2006, things would have been very different. He would have got the new terms of retirement, which is far higher than those applicable for 31 December 2005. A day makes so much of difference. The difference is so large that he feels very miserable, when he think of this ONE DAY. People who retired around that period – in 2005- feel so bad, miserable and dejected; just over a few day’s or week’s difference.

The retirement benefits of two persons of the same position and pay ( one retired on 31Dec 2005 and the other on 1Jan 2006) should be almost equal ( atleast comparable in the amount of terminal benefits and subsequent monthly pension). That’s natural justice, I believe. To give an example, when my 010106 friend got 10 lakhs as his gratuity, another one (311205) got just 3.5. This is certainly not fair. It’s not justice.

But the 6CPC and the Government has not looked at the implementation in this angle. This is cruel and injustice. I strongly feel that the Government should normalize this huge difference caused by that milestone day. The improved retirement benefits and pension should be applicable to those retired earlier too (pre 2006). The applicability of the benefits may be made in a tapering method. May be, 10% less for every year preceding 2006 (eg. For persons retired in 2005, the terminal benefits may be 90% of what a person retiring on 1Jan 2006 gets). This would atleast bring in some justice to those unfortunate ones.The financial load on the Government by implementing such a justice would not be very high.

I wish, our Government would consider the plight of the retired people, and do a normalization of terminal benefits and pension.

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The bulging purses

The purses of over 5 million Central Government employees are quite heavy and bulging out now. There’s lot of money with them, with the wind fall gains following the 6CPC implementation.

As in last time (in 1997), most of these huge amounts (received as arrears) will land up in the consumer durables market. That’s exactly why most of these companies are vigorously in the market with attractive schemes and offers ( Navaraathri is just another added reason).

Experts on Personal Finances have a piece of advice to these new millionaires -

“Caution …. before spending all your money on cars, TVs, and PCs, keep in mind the future value of money”.

Here are the important DOs and DON’Ts, (on how to spend your arrear amounts), these Experts suggest.

1. Keep 3 months (household) expenses aside for contingencies.
2. Pay-off Credit Card dues (if any, in full).
3. Prepay Home Loans (if any), as much as possible.
4. Take a Medical Insurance (if not covered by other schemes).
5. Make a Mutual Fund deposit (may consider the Tax gains too).
6. Charity- contribute you might
7. DO NOT park your money in Fixed deposits (or in SB accounts) , as you will most probably end up in a loss, accounting for inflation.

Regarding the increased monthly salary, experts suggest that only a part of your raise be used for household expenses. The balance amount (of your increased salary) should be put in a recurring deposit or SIP into a suitable Mutual Fund.

Retired Employees also would get their revised increased pension. The arrears and the increased monthly pension should be dealt carefully and wisely ( Remember, hard times are ahead, it looks ). You can’t expect any raise in your pension , in the near future (for another 10 years ) !

Retired persons should consider regular expenses (going up always) , contingencies (any time guest !) and growth of capital (to beat inflation).

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6PC and Pension

I have a personal question to all my friends here.
Do you think the 6CPC and Government did justice to the Pensioners ?
Instead of believing 'that's how it is ', please think different. If you have an answer to my question, please do post your comment. Thank you.