The government on Wednesday notified the pending implementation of the 7th Central Pay Commission (CPC) for armed forces.
The implementation was held back after armed forces (Army, Navy and IAF) last year protested that their persisting salary anomalies had not been addressed by the seventh pay commission, according to a report in The Times of India.
Around 14 lakh armed forces personnel have not received their revised pay packages under the 7th CPC implemented from January 2016 onwards.
The government also agreed to the demand of armed forces personnel to continue with an earlier system of disbursing disability pension and not implement a new regime recommended by the seventh pay commission.
The armed forces had been demanding the retention of the percentage-based regime for disability pension implemented post 6th CPC and were strongly opposed to the slab-based system suggested by the seventh central pay commission (CPC).
The decisions were taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi.
The issue of disability pension was referred to the National Anomaly Committee by the Ministry of Defence on account of the representation received from the Defence Forces to retain the slab-based system, as it would have resulted in reduction in the amount of disability pension for existing pensioners and a reduction in the amount of disability pension for future retirees when compared to percentage-based disability pension.The decision will benefit existing and future defence pensioners and would entail an additional expenditure of approximately Rs 130 crore per annum.
Apart from this, the government has also addressed three major salary structure issues of the armed forces, including providing pay protection to those getting promotion from the rank of brigadiers.
At present, some of the personnel who get promoted to higher ranks lose on the military service pay.
After the Cabinet meeting, Defence Minister Arun Jaitley also ensured that the government notified the demand of extending pay matrix from 24 years to 40 years and carrying out rationalisation of pay Lt Colonels and Colonels.
The government also cleared the changes in recommendations of the seventh CPC relating to the method of revision of pension of pre-2016 pensioners and family pensioners based on recommendations of the Ashok Lavasa panel.
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The new decision will benefit over 55 lakh pre-2016 civil and defence pensioners and family pensioners. The new formulation will entail an additional benefit to the pensioners and an additional expenditure of approximately Rs 5,031 crore for 2016-17.
The advantages of the proposed modifications will be available with effect from January 1, 2016, the date of implementation of 7th CPC recommendations.
With the increase approved by the Cabinet, the annual pension bill alone of the central government is likely to be Rs 1,76,071 crore, the government said.
"The Cabinet also approved the retention of percentage- based regime of disability pension implemented post sixth CPC which the seventh CPC had recommended to be replaced by a slab-based system," the government said.
It said decision will benefit existing and future pensioners of the armed forces and would entail an additional expenditure of approximately Rs 130 crore per annum.
The government was under attack from the opposition parties as well as the military establishment over slab-based system following which the matter was referred to the National Anomaly Committee by the Ministry of Defence.
The armed forces felt the new system would result in reduction in the amount of disability pension for existing as well as future retirees compared to percentage-based disability pension.
The military personnel were upset as civilian pensioners were to be paid pension according to the earlier percentage system.
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