Lavasa panel fails to wrap up deliberations on 7th pay commission

Employees seek clarity on 14 additional allowances that the pay panel did not include in its report

A panel headed by Finance Secretary Ashok Lavasa, tasked with examining the 7th Pay Commission’s (7th CPC) recommendations on allowances, has been forced to delay wrapping up its deliberations as representatives of the central government’s 4.7 million employees have sought clarity on 14 additional allowances that the pay panel did not include in its report.

This will lead to the late submission of observations by the Lavasa panel to Finance Minister Arun Jaitley, which, in turn, will cause a delay in the Union Cabinet’s and Prime Minister Narendra Modi’s final decision on the matter.

Out of 196 allowances, the 7th CPC report recommended the abolition of 52 allowances and subsuming of another 36 into the existing ones. In addition, there were some 14 allowances that were not included in the report. These included accident allowance, allowance in lieu of running room facilities, breach of rest allowance, ghat allowance, officiating allowance, outstation detention and receiving allowances, shunting allowance, trip allowance and waiting duty allowance, among others. The CPC report stated that allowances not mentioned in the report should be abolished anyway.

“We have had representations from employee unions that a decision should be taken on these allowances as well. These have come from various ministries and hence a call will have to be taken. There will be another meeting soon to decide on this particular matter,” said a senior government official.

The official said the CPC’s original expenditure assessment of nearly Rs 30,000 crore additional annual outlay on implementing its recommendations on allowances is expected to be unchanged.

All other decisions, including on house rent allowance, will be finalised in the next meeting, which the Lavasa panel hopes will be its last one, the official added. 

After that the cabinet is expected to decide the issue soon. It is understood that the Centre wants to move fast on this issue.

In late June last year, after implementing the CPC proposals on salary and pension, Jaitley had announced the Lavasa panel would examine the suggestions on allowances. It had time till October to give the report but this got delayed. The decision on allowances was postponed because the CPC wanted a number of them to be abolished or subsumed, while employee unions opposed this.

A deferment on revising of allowances meant that as opposed to a burden of Rs 1.02 lakh crore as envisaged by the CPC, the government had provisioned for Rs 84,933 crore in 2016-17 for pay and pension, including Rs 12,000 crore in arrears.

There are other recommendations on allowances which the panel led by Lavasa has been tasked with examining. These include a change in the present system of accounting, wherein pay and allowances are clubbed and it is difficult to bifurcate them. The CPC recommended a separate object head for budgeting and accounting be used to record the expenditure.