Rs 20000 minimum salary and health insurance to be main features in 7th Pay Commission Report

| September 24, 2015

Rs 20000 minimum salary and health insurance to be main features in 7th Pay Commission Report

New Delhi: The Seventh Pay Commission is likely to propose minimum basic salary Rs 20,000 of central government employees.

Highly-placed sources in the pay panel said on Monday, “the average increase in basic pay for all government employees will be in the region of 30-40%.”

Currently, the minimum basic salary of central government employees is Rs 7730 with Grade pay excluding dearness and other allowances. After the Seventh pay commission recommendations will come into force, the minimum basic salary will be 20,000 excluding dearness and other allowances.

A competitive minimum pay is important because it determines the the socialism view of the government and the higher number of central government employees are in the minimum pay slabs. Apart from giving good salary to lower grade employees, the pay panel also will have to consider the disparity ratio between its highest and lowest paid employees.

“A joint secretary gets now Rs 128,000 as monthly salary with dearness allowance. I do not expect it to go up to more than Rs 160,000,” a joint secretary-level official of the Central Government said.

The first, second, third, fourth, fifth pay and sixth pay commission recommended the minimum basic salary Rs 35, Rs 80, Rs 260, Rs 950, Rs 3050 and Rs 7730 respectively.

The Commission has already completed discussions with various stakeholders, including organisations, federations, groups representing civil employees as well as Defence services and is in the process of finalising its recommendations.

It’s now in the process of finalising its recommendations.

The Seventh Pay Commission is also likely to keep the retirement age of central government employees unchanged at 60 years, although most of the central employees bodies sought to increase the retirement age to 62 years in their memorandum in the pay panel.

“We are not going to either recommend lowering or raising the retirement age. If we lower the age limit, the pension burden will bust the government’s medium-term fiscal targets.” highly-placed sources in the pay panel said.

Seventh Pay Commission Likely To Introduce Health Insurance

In a move that could benefit more than 50 lakh central government employees and 56 lakh pensioners, the Seventh Pay commission is planning to propose to introduce health insurance scheme to replace Central Government Health Scheme (CGHS) at highly subsidized rates.

The pay panel has already held detailed discussions about this with various stakeholders, including organisations, federations, groups representing civil employees as well as Defence services.

The pay panel will ask the central government to urge the insurance industry to come up with feasible health insurance solution for the central government employees and pensioners. The IRDA, the insurance regulatory body of India, will be compelled to ask the health insurance companies to offer a basic insurance to every central government employee and pensioner, regardless of age or medical condition and are not allowed to make a profit off this basic insurance.

The serving central government employees in non-CGHS areas are provided healthcare facilities under the CS(MA) Rules, 1994, but pensioners are not covered under these rules.

The pensioners are, however, entitled to a fixed medical allowance of Rs 500 per month. The pensioners residing in non-CGHS areas have the option to become a CGHS member in any CGHS-covered city of their choice to avail the medical facilities under the CGHS Scheme.

Health insurance would be available for central government employees and pensioners till death, with the insured employees and pensioners will have to pay 50% of the premium from their salaries and pensions and the remaining 50% premium may be paid by the central government.

The health insurance would cover a family of six the employee and pensioner himself or herself, the spouse, two children and two parents. The maximum sum assured for family in a year could up to Rs 5 lakh.

Under the CGHS, the annual per capita expenditure is more than Rs 5,000. In contrast, the National Rural Health Mission (NRHM), which caters to the rural masses, spends just Rs 180 per head.

The CGHS is financed mainly through the Centre’s tax revenues. Though beneficiaries do contribute a share of their wages towards premium, ranging from Rs 600 to Rs 6,000 a year depending on their pay scale, this accounts for just about 5 per cent of the total expenditure. The government shells out the remaining 95 per cent.

So, the central government also wanted for ending the CGHS in its current form and to move to an insurance-based health scheme to cut costs.

Category: News, Seventh Pay Commission

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