Monday, December 22, 2008

PM to clear Demands of Armed Forces

Prime Minister Manmohan Singh is set to clear the demands of the armed forces on the sixth pay commission.

Officers of the Lieutenant Colonel rank will now get Rs. 10000 more than the present salary per month.

As per the new provisions, the three star officers will be at par with Director Generals of Police.

It also makes provisions for retiring jawans to continue to get pension equivalent to 70 per cent of their the last pay the draw.

However, the demand for pay parity between military and civilian officers has been rejected.

A ministerial committee, headed by External Affairs Minister Pranab Mukherjee, was set up to look into the armed forces' grievance about pay anomalies. The committee, which also included Antony and Chidambaram, was set up by the Prime Minister on September 25 in the wake of deep resentment in the armed forces, who complained that there were anomalies in the sixth pay commission recommendations and that it had lowered the status of their officers.

(As reported by NDTV)

CPC HBA recommendation not implemented yet

The Economic downturn seems to be delaying the announcement of a new home loan policy for Central Government employees as recommended by the Sixth Central Pay Commission (CPC).

Known as the house building assistance (HBA), it’s a key interest-bearing advance given by the government to its employees to construct/acquire house/flats of their own. The HBA is given to all permanent employees, members of All India Services (IAS, IPS & IFS) deputed to the Central government, public sector undertakings (PSUs) under control of the Centre, international organisations, autonomous bodies etc. The advance is to assist acquiring a plot and constructing a house thereon, building a new house on a plot already owned singly or jointly with spouse, enlarging living accommodation in a house, purchase of a ready built house/flat etc.

According to existing rules, the cost of the house (excluding cost of land) should not exceed 134 times the basic pay (and dearness pay taken together) subject to a maximum of Rs 18 lakh and a minimum of Rs 7.5 lakh. Although this advance is interest bearing, it has an inherent subsidy since interest is has to be paid only after the principal has been repaid and simple interest is chargeable on the advance. The rates of interest, therefore, are somewhat lower than existing market rates.

The Sixth Central Pay Commission in its report said: “It is desirable to provide only for the element of interest subsidy and make available various interest bearing advances to government employees through arrangements with public sector banks. This will not only give the government employee the freedom to approach the specified bank for a loan but would also simplify the existing procedures saving a lot of administrative work which is presently being done in government offices for grant of loans and servicing thereof.” The CPC recommended the government should enter into an agreement with leading PSU banks to extend this facility at pre-determined competitive rates to its employees. The employee shall take the loans/advances directly from the bank with the approval of the sanctioning authority in the government and repay installments directly to the bank.

The Sixth CPC also said: “The eligibility for taking the advances should also be removed because the repaying capacity would, in any case, be consid ered by the concerned bank at the time of pro cessing the loan application. This will also extend to the ceiling of Rs 18 lakh presently prescribed on the cost of house for pur poses of house building advance. Therefore, this ceiling should also be removed.” But this policy has not been implemented till date. The Ministry of Finance in a notification dated October 24 said: “The implementation of the recommenda tions of the Sixth Central Pay Commission relating to interest bearing advances granted to government employees is under consideration of the government. Meanwhile, pending finalisation of the new arrangement, the existing provisions for interest-bearing advances to purchase motor car, motorcycle, scooter, moped and personal computer would continue to be in operation.” But it was silent on the HBA.

(Published in Hindustant Times, Delhi on 22/12/2008)