Allowances as suggested by Sixth Pay Commission

New Delhi, Aug 27, 2008: Following are the list of allowances as suggested by Sixth Pay Commission:

4.1.3 The Fifth Central Pay Commission recommended uniform neutralization of DA at 100% to employees at all levels; conversion of DA into Dearness Pay each time the CPI increases by 50% over the base index with Dearness Pay counting for all purposes including retirement benefits; and Dearness Allowance including Dearness Pay being paid net of tax. The Commission did not favor the option of employing separate indices for each category of employee because of the sheer impracticality of the task and, therefore, recommended using the 12 monthly average of All India CPI (IW) with base 1982 for calculating DA.

• DA should be paid net of taxes on the same line asrecommended by the 5th CPC to make the concept of 100% neutralization somewhat meaningful. Determining the level of inflationmethodology 4.1.7 While considering the issue of the quantum of DA admissible, the Commission considered at length the procedure for estimation of inflation. Presently, inflation as determined by the AICPI (IW), is estimated using the Laspeyere’s Fixed base methodology. The inflation index using this methodology captures the cost of buying a basket of goods (fixed in the base year) at current prices relative to the cost of buying the same basket of goods at base year prices.

4.1.11 Presently, the estimation of DA for Central Government Employees is based on the movements in the AICPI (IW) (1982=100). The Fourth Central Pay Commission, while considering the issue of suitability of the AICPI, opined that the Government should examine whether a more suitable index could be prepared for Government employees taking into account their consumption pattern and other relevant factors. This recommendation was based on the view that the AICPI does not truly represent the consumption pattern of all central Government employees. On the other hand, the Fifth Central Pay Commission took the view that consumption patterns of Group A,B,C,D employees within Government are bound to be different due to different income levels and hence a suitable index based on consumption pattern for Government employees as recommended by the Fourth Central Pay Commission is likely to suffer from the same set of problems which the AICPI(IW) suffers. The Fifth Central Pay Commission opined that even though the option of employing separate indices for each category of employees did exist, it was devoid of merit because of the sheer impracticality of the task as well as needless suspicion such an arrangement was likely to arouse between various groups. Therefore, they recommended that the AICPI (IW) should continue to be the index used for calculating DA for Government employees.

4.1.15 The rate of dearness allowance is calculated in terms of the percentage increase in 12 monthly average of AICPI (base 1982) over the average index of 306.33, which was the reference base for the existing scales of pay recommended by the Fifth Central Pay Commission.

4.2.4 City Compensatory Allowance (CCA) is granted to Central Government employees to adjust the high cost of living in certain specified localities.

4.2.9 Special Compensatory Allowance (Hill Areas/Remote Locality/Border Area/Gandhinagar) - Special Compensatory Allowances are paid on account of exceptionally difficult local conditions in various places.

4.2.10 Hill Area allowance - It is granted to Central Government employees posted at Hill stations located at an altitude of 1000 Mtrs. or more above sea level. The rates of Special Compensatory (Hill Area) Allowance vary between Rs.40 to Rs.300 per month. 4.2.11 Special Compensatory (Remote Locality) Allowance - It is payable to the employees serving in specified remote localities at rates varying between Rs.40 to Rs.1300 per month.

4.2.17 Tribal Area Allowance – It is paid in certain Tribal Talukas and pockets in certain States and is payable at rates varying between Rs.40 to Rs.200 per month.

The rates of all the components of Daily Allowance shall automatically increase by 25% whenever the Dearness Allowance payable on the revised pay bands goes up by 50%.

4.2.44 Simultaneously, the existing condition which prohibits grant of Transport Allowance to the employees who have been provided with official accommodation within one Kilometer of the office should also be removed because this creates an artificial distinction between the employees living in private accommodation within one Kilometer of the office vis-à-vis those living within one Kilometer of the office in Government accommodation. Other conditions regulating the grant of this allowance shall remain unchanged. Physically disabled employees shall continue to draw this allowance at double the normal rates. This, however, will be further subject to the condition that Transport Allowance in the case of physically disabled employees shall, in no case, be less than Rs.1000 per month plus the applicable rate of dearness allowance. Employees in pay band PB-4 who are entitled to the use of official car for travel between residence and office may be given the option to draw transport allowance at a higher rate of Rs.7000 p.m. plus dearness allowance provided they give up the use of official car for travel between residence and office.

Non-Practicing
4.2.45 Presently, Doctors are given Non-Practicing Allowance (NPA) at the rate of 25% of the basic pay subject to the condition that NPA + basic pay + dearness pay does not exceed Rs.44,250. NPA is counted as pay for all service and pensionary benefits.

4.2.55 The Fifth CPC had recommended a high increase in the HRA of Metropolitan towns like Delhi & Mumbai in view of the inordinate increase in monthly rents for residential accommodation in the period upto 1995 in these cities. The Fifth CPC also persisted with the population criteria for classification of cities and towns and recommended creation of a new category of A-1 cities for cities having a population of 50 lakh and above.

Demands 4.2.56 The Commission has received many demands relating to payment of HRA. Most of the demands seek an increase in the rates of HRA especially in cities other than A-1. Demands have also been received for granting A-1 status to the cities of Bengaluru and Hyderabad. This demand was, however, conceded by the Government during the term of the Commission and Bengaluru and Hyderabad already stand classified as A-1 cities.

Risk Allowance 4.2.65 Risk Allowance is presently given to employees engaged in hazardous duties or whose work will have deleterious effect on
health over a period of time. Risk Allowance is also paid to
Sweepers and Safaiwalas engaged in cleaning of underground
drains, sewer lines as well as to the employees working in trenching
grounds and infectious diseases hospitals.


The Commission, recommends continuation of the five day week in the offices of the Central Government. Holiday policy 4.5.6 As regards the issue of holidays, there can be no rationale for observing a large number of closed holidays in the Government along with a five day week. It is also very true that in a secular nation, religious festivals should be treated as personal to each individual employee without the Government offices having to be closed on that account. Keeping in view the recommendations of
the Fifth Central Pay Commission in this regard, the Commission 270 recommends that, henceforth, the Government offices should remain closed only on the 3 National holidays. No other closed holidays should be allowed. To enable the Government employees the freedom to celebrate their festivals and other
occasions of special significance to them, the number of
Restricted Holidays available to an employee shall be increased
to 8 with the list of Restricted Holidays being suitably enlarged
to include all the erstwhile Gazetted Holidays therein.

4.7.2 Keeping in view the dual responsibilities borne by working
women and the increasing practical difficulties in balancing work
and family responsibilities, previous Pay Commissions made
recommendations for providing special facilities for women in terms
of provision of residential accommodation for single women,
provision of transport facilities, introduction of concepts such as
flexi-time and flexi-place on trial basis, options for working half
time during the period that children are young , etc. The provisions
made by the Central Government for women employees include age
relaxation for appointment in Group ‘C’ and ‘D’ posts, exemption
from educational qualifications for compassionate appointments to
widows of deceased Government employees, maternity and
paternity leave benefits, guidelines for provision of crèche facilities
as well as for posting of husband and wife at the same station.
Demands of the Staff Side
Recommendations 4.7.5 The Commission has studied the facilities provided in other
countries and taken into account the demands made in this regard.
It is the considered opinion of the Commission that adequate
facilities need to be provided to ensure that more women take up public employment and to enable them to balance the dual responsibilities of looking after children and work. In pursuance of this, the Commission makes the following recommendations: -

(i) The concept of staggered working hours needs to be introduced for women employees as it would give flexibility to employees to work either early or late depending on their requirements at the home front. Under this scheme, 11 AM to 4 PM will be core hours during which all women employees will necessarily need to be present in the office. They will, however, have the option of either coming upto one and a half hours earlier or
leaving upto two hours late depending upon the actual time
they have clocked in.

(ii) The concept of child care leave exists in countries like Japan & Netherlands where women employees are allowed leave to look after the needs of their children. A similar facility needs to be extended in Central Government as it will facilitate women employees to take care of their children at the time of need. All women employees having minor children may, therefore, be allowed total leave of upto two years (i.e. 730 days) for taking care of upto 2 children whether for rearing the children or looking after any of their needs like examination, sickness, etc. Child care leave should also be allowed for the third year as leave not due. However, no child care leave shall be given for a child who is eighteen years of age or older.

(iii) Although instructions exist in regard to setting up of daycare- centers/crèches in offices or major residential areas, most Departments have not created such facilities. The setting up of these crèches should be made mandatory in offices where the employees, male and female, have preschool or primary school going children. This will enable male employees also to keep their children in such crèches. These crèches could also be run on contributory basis so that appropriate standard of facilities is maintained.

(iv) Maternity leave of 135 days is presently permitted to women employees for two children. Further, leave up to a 279 period of one year can be availed of in continuation of maternity leave. Keeping in view the guidelines of Ministry of Health & FW which recommends nursing of children till the age of 6 months, the Commission recommends that maternity leave should be increased from 135 days at present to 180 days. Further, the period of leave which can be availed of in continuation of maternity leave should be increased to 2 years instead of one year at present.



Medical facilities for serving employees & pensioners
Introduction 4.11.1 Presently, serving Government employees paid from civil estimates other than those working in Railways and Delhi
Administration are covered under the Central Government Health
Scheme (CGHS) which is a compulsory scheme for all Central
Government employees residing within the area covered by the
CGHS Dispensaries. CGHS is a contributory scheme and the
Government employees have to contribute varying sums between
Rs.15 to Rs.150 p.m. for this facility. Pensioners/family pensioners
can also avail CGHS facilities on payment of registration fee. It is
not necessary for pensioners/family pensioners to be living in the
areas covered under the CGHS for joining it. Railways and Defence
have their own medical infrastructure and their
employees/pensioners are not covered under CGHS. Presently, the
coverage of CGHS is available in 24 cities. Central Government
employees living outside these cities are not covered under CGHS.
Employees and their family members living outside the CGHS
areas are entitled to reimbursement for medical attendance and
treatment under the Central Services (Medical Attendance) Rules
[CS(MA) Rules]. These CS (MA) Rules, however, are available
only to the serving Government employees and the pensioners are
not covered under these rules. Pensioners living in non-CGHS
areas are allowed a sum of Rs.100 p.m. for meeting their medical
expenditure that does not require hospitalization. The amount of
Rs.100 was recommended by the Fifth CPC and has remained
unchanged since then. Pensioners living in non-CGHS areas are,
however, eligible for reimbursement of expenditure incurred on
hospitalization in accordance with the prescribed rules.
Demands 4.11.2 Some associations of Government employees in their
submissions to the Commission have lamented the poor quality of
service available under CGHS and sought an alternative to it. The
Central Government pensioners living in non-CGHS areas and
their associations have demanded reimbursement of medical
expenditure under the CS (MA) Rules on par with what is available
to the serving employees. Substantial enhancement in the amount
Chapter 4.11
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of medical allowance of Rs.100 presently payable to pensioners
living in non-CGHS areas has also been demanded.
Analysis and
recommendations
4.11.3 The Commission is aware that there is increasing pressure
on CGHS which sometimes results in less than satisfactory services
being provided to its beneficiaries. On the obverse, CGHS is
appreciated by a number of employees and most of the pensioners.
In fact, most of the pensioners associations, in their submissions to
the Commission, have requested continuance of CGHS facilities.
The need of the hour may, therefore, be to retain the existing
scheme of CGHS while simultaneously providing optional inpatient
facilities (IPD) through medical insurance. This will
provide an alternative to such of those employees/ pensioners who
are not satisfied or are not living in the areas covered by CGHS.
The Commission, therefore, recommends that the Government
should revise entitlements for treatment in IPD for CGHS card
holders so that private ward facilities are available at least to the
employees in PB-2 pay band. The Commission is not in favour of
extending CS(MA) Rules to the pensioners as not only it will
prove to be very costly (estimates given by the Government peg
it at Rs.1,820 crore p.a.) but will also suffer from problems
relating to submission of bills, its verification and subsequent
payment, etc. This will pose additional problems for the
pensioners claiming reimbursement and will generate additional
administrative work with attendant problems for the
Government. The Commission is of the view that an insurance
scheme should be devised for meeting the OPD needs as well. In
the interregnum, the Government should consider enhancing the
amount of medical allowance for pensioners living in non-CGHS
areas appropriately.

Health insurance for Government employees & pensioners
4.11.4 Availability of health service providers in the private sector
has increased discernibly in the recent past. Therefore, making
available the in-patient facilities through a set up outside CGHS is
now viable. CGHS, by way of referrals, is already using this both
private and Government network. CS (MA) Rules, in any case,
operate through a system of Authorized Medical Attendants
(AMA) where adequate number of Government Doctors is not
available. CS (MA) Rules also provide for a set of empanelled
hospitals where the concerned employees can take treatment. The
Commission was informed that the Government is in the final
stages of introducing a health insurance scheme for its employees
so as to provide them with wider facilities and quality health care
without directly burdening the Government with the
administrative responsibility of verifying bills and/or expanding
public sector medical infrastructure. The scheme being formulated
by the Government, however, had not been formalized till the time
of finalization of this Report. Accordingly, the Commission is
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recommending a scheme of health insurance for Central
Government employees and pensioners in this Report.
Recommendations 4.11.5 The Commission, accordingly, recommends introduction
of a Health Insurance Scheme for Central Government
employees/pensioners as under :-
i) For the existing employees and pensioners, the Insurance
Scheme would be available on voluntary basis subject to
paying the prescribed contribution. Contributions should
be based on the actual premium paid. Group A, B and C
employees should contribute 30%, 25% and 20% of the
annual premium respectively with the Government
paying the remainder. This arrangement should be
reviewed periodically.
ii) The Health Insurance Scheme would be compulsory for
new Government employees who would be joining
service after the introduction of the Scheme. Similarly,
new retirees after the introduction of the Insurance
Scheme would be covered under the Scheme. The new
recruits and pensioners will consequently not be provided
CGHS / CS (MA) facilities. The new recruits and the new
retirees may be paid an appropriate amount for meeting
their OPD expenditure till the time an insurance scheme
for providing OPD facilities is devised.
iii) Serving employees and existing pensioners shall have the
option to opt out of CGHS and subscribe only to the
Insurance Scheme, thus making their own arrangements
for OPD needs. In such cases, they will not pay
contributions to the CGHS. On par with new recruits,
they will need to contribute only the amounts prescribed
for similarly placed class of employees/pensioners under
CGHS and may also be paid an appropriate amount for
their OPD expenditure till the time an insurance scheme
for providing OPD facilities is devised. The serving
employees in non-CGHS areas may also opt for Health
Insurance Scheme and subscribe to the same.
iv) All personnel of the Central Government including All
India Service officers, serving and retired, and others who
are covered under the existing CGHS and under CS (MA)
Rules may be offered the health insurance scheme on a
voluntary basis.
Railways &
Defence
(combatants)
4.11.6 The aforesaid scheme has been recommended for
Government employees paid from civil estimates other than those
working in Railways. However, Railways and Defence
(combatants), who are having their own medical infrastructure,
should also devise a similar scheme for their employees.

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