7th Pay Commission – Overtime allowance will be a history

| May 4, 2016

Overtime Allowance not to be continued – 7th Pay Commission report observes that except for operational and Industrial Employees, OTA is to be abolished

The 7th Pay Commission has recommended that overtime allowance, except for operational staff and industrial employees governed by statutory provisions, should be abolished, after data showed that the expenditure under the head for the Railways and Defence ministries more than doubled in seven years ending 2012-13.

A committee of secretaries headed by Cabinet Secretary P. K. Sinha is reviewing the Commission’s recommendations. Overall, the overtime paid by the Government increased from Rs.797 crore to Rs.1,629 crore in the period, prompting the Commission to observe that government offices need to increase productivity and efficiency; and recommend “stricter” control on the Centre’s expenditure under the head.

Overtime Allowance paid to Employees in 2012-13

Railways 791.65 crores
Civilian Defence 732.73 crores
Total Overtime Paid 1629 crores

It could be seen that out of total overtime allowance of Rs. 1629 Crores paid by the Central government during the year 2012-13, Employees attached to Railways and Defence (civilian employees) Ministries alone have been Rs. 1525 crores, which is more than 90% of total OTA paid by Govt.

“Government employees, like every one else, should be paid for results, not to spend time in the office…but overtime is mandated by law in organisations like railways and in such cases payments must be realistic and not frozen in time and hence the recommendation to increase them by 50 per cent,” economist and Seventh Pay Commission Member Rathin Roy told The Hindu .

While the Ministry of Defence has achieved some success in controlling payment of the allowance, the efforts of the Railways Ministry have not borne fruit as yet. As a percentage of pay, overtime allowance is declining in the Ministry of Defence but is on the rise in the Ministry of Railways. The allowance decreased to 6.54 per cent of pay in 2012-13 from nearly 8 per cent in 2006-07 in the Ministry of Defence. It increased to 2.58 per cent in the Ministry of Railways in 2012-13 from 2.09 per cent in 2006-07.

Overtime paid to employees in the Railways is rising faster than even their pay. The compounded annual growth rate of 17.2 per cent for overtime in the ministry exceeds that of pay which is 13.2 per cent. If the government decides to continue with the allowance for those categories of staff for which it is not a statutory requirement, then it should be increased by 50 per cent, the panel recommended.

In the Ministry of Railways, overtime paid to employees is rising faster than even their pay

Source: The Hindu

Category: News, Seventh Pay Commission

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