Thursday 27 August 2015



Cabinet clears four-month extension to 7th Central Pay Commission

Written By Admin on August 26, 2015 | Wednesday, August 26, 2015

The Union Cabinet today cleared a four-month extension to the term of the 7th Central Pay Commission today.

Set up by the UPA government in February 2014, the 7th Central Pay Commission was to make its recommendations within 18 months. Its term would have expired on August 27.

“In view of its volume of work and intensive stake-holders’ consultations, the 7th Central Pay Commission had made a request to the Government for a four month extension up to December 31, 2015,” a government statement said.

Constituted almost every 10 years, the Pay Commission’s main task is to revise the pay scale of its employees. The recommendations of the 7th Pay Commission—slated to come into effect from January 1, 2016, would impact around 48 lakh central government employees and 55 lakh pensioners.

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.

Source : The Indian Express
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Wednesday 19 August 2015

RBI grants in-principle nod for 11 payments banks

Written By Admin on August 19, 2015 | Wednesday, August 19, 2015

Payment banks allow mobile firms, supermarket chains, and others to cater to individuals and small businesses.

The Reserve Bank on Wednesday granted ‘in-principle’ approval to 11 entities, including Reliance Industries, Aditya Birla Nuvo, Vodafone and Airtel, to set up payments banks and proposed such licences ‘on tap’ in future.

The other entities which have been given ‘in-principle’ approval are Department of Posts, Cholamandalam Distribution Services, Tech Mahindra, National Securities Depository Limited (NSDL), Fino PayTech, Sun Pharma’s Dilip Shantilal Shanghvi and PayTM’s Vijay Shekhar Sharma.

“The ‘in-principle’ approval granted will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the guidelines and fulfil the other conditions as may be stipulated by the Reserve Bank,” RBI said in a statement.

Going forward, RBI said the central bank would use the learning from this licensing round to appropriately revise the guidelines and move to give licences more regularly, virtually “on tap”.

Payment banks allow mobile firms, supermarket chains, and others to cater to individuals and small businesses.

The Payments Bank will be set up as a differentiated bank and shall confine its activities to acceptance of demand deposits, remittance services, Internet banking and other specified services.

Payments Banks will initially be restricted to holding a maximum balance of Rs. 1 lakh per individual customer.

They will be allowed to issue ATM/debit cards as also other prepaid payment instruments, but not the credit cards.

These banks can also distribute non-risk sharing simple financial products like mutual funds and insurance products.

They will not be allowed to undertake lending services and non resident Indians will not be allowed to open accounts.

RBI further said that on being satisfied that the 11 applicants have complied with the requisite conditions as part of ‘in-principle’ approval, it would consider granting to them a licence for commencement of banking business.

Until a regular licence is issued, the applicants can not undertake any banking business, the central bank added.

Draft guidelines for licencing of payments banks were released for public comments and the final guidelines were issued on November 27, 2014.

A total of 41 applicants had applied for payments banks.

Differentiated banking entails going beyond the current universal banking framework to serve specific purposes.

The move to allow such differentiated banks came after RBI had found just two entities — infra player IDFC and micro-lender Bandhan from among over two dozen applicants — eligible for setting up commercial banks.

The central bank issued this limited set of licences on April 1, 2014, after a decade. Both applicants are yet to begin operations even after a year as they have time till October.

Commercial banks comprise 27 public sector banks, 20 private, 44 foreign, 4 local area banks and 56 regional rural banks.

On the selection process, RBI said a detailed scrutiny was undertaken by an External Advisory Committee (EAC) under the chairmanship of Nachiket Mor, Director, Central Board of the Reserve Bank of India.

The recommendations of the EAC were an input to an Internal Screening Committee (ISC), consisting of the Governor and four Deputy Governors.

Source :
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7th Pay Commission latest update

Seventh Pay Commission seeks one-month extension from finance ministry

Written By Admin on August 18, 2015 | Tuesday, August 18, 2015

The panel headed by A.K. Mathur is unlikely to recommend lowering of the retirement age or push for lateral entry and performance-based pay

Finance minister Arun Jaitley. The Seventh Pay Commission was supposed to submit its report and recommendations to the finance ministry on 31 August. Photo: HT

New Delhi: The Seventh Pay Commission, headed by justice A.K. Mathur, has sought a one-month extension from the finance ministry and is preparing to submit its report by the end of September. The commission is unlikely to recommend the lowering of the retirement age as rumoured earlier or push for lateral entry and performance-based pay.

The commission, set up once in every 10 years to review pay, allowances and other benefits for central government employees, was appointed by the previous government on 28 February 2014 and was asked to submit its report in 18 months, which falls on 31 August.

“There are some data points that are missing, which we hope to get by this month end. We are trying to submit the report by 20 September,” an official of the commission said, speaking on condition of anonymity.

The Sixth Pay Commission had submitted its report a little ahead of its deadline on 24 March 2008. The revised pay scales were implemented retrospectively starting 1 January 2006, while recommendations relating to allowances were implemented prospectively.

The finance ministry apprehends that salary and pension expenditure will both rise by around 16% in 2016-17 as a result of the implementation of the Pay Commission recommendations. This may allow capital expenditure to grow by no more than 8% during the year, leaving little room to aggressively push for an infrastructure build-up.

“The Pay Commission impact may have to be absorbed in 2016-17. The phase of consolidation, extended by one year, will also be spanning out in this period. Thus, in the medium-term framework, the fiscal position will continue to be stressed,” the finance ministry said in the 2015-16 budget presented in February.

The official cited earlier said the Pay Commission report needs to be effective from 1 January 2016, or by April 2016 at the latest.

“It will be the government’s prerogative when to implement it. But beyond 1 January 2016, there will be arrears. But then, the government will be subject to criticism. Earlier, they had hidden behind Pay Commissions giving late reports,” he added.

However, the official said the commission is likely to maintain the status quo on the retirement age of central government employees, currently 60 years. “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,” he added.

Asked whether government has sent any directives to the commission on the kind of hike it can afford, the official said the message it has got broadly is to keep the hikes low. “Merge the basic with dearness allowance, don’t stretch it beyond—that is the message. But that is a good message for the government to send. But there is no pressure otherwise. In fact, there is a lot of cooperation,” he said.

The official said merging basic pay with dearness allowance, which is mandatory, would itself mean a 155% rise for central government employees. “We have to decide how much to give above that. So, it will look good if you compare basic to basic,” he added.

On whether the commission will recommend performance-based pay bands, he said it will make some feasible recommendations, though he couldn’t guess if the government would accept them. The Sixth Pay Commission had also recommended performance-based pay revisions, but the government is yet to implement them.

“Eighty-eight percent of central government employees are industrial and non-industrial workers working with railways, post, paramilitary and army. So, performance-based pay revision is the wrong instrument for them. Biggest growth in government services is in paramilitary forces, where staffs in Central Reserve Police Force and Central Industrial Security Force have gone up by 75-80% in the last 10 years. By the time we have dealt with them, the bureaucracy is an afterthought. It does not affect anything,” he added.

D.K. Joshi, chief economist at rating agency Crisil Ltd, said the government is expected to be restrained in its pay hikes this time around, given the low inflation level and tepid growth momentum. “The last two Pay Commissions had significantly bumped up demand and fiscal deficit. But the government is unlikely to be populist this time. It has already showed restraint in the hike in minimum support prices for farmers,” he said.

However, Joshi said the Pay Commission will have a permanent income effect as well as a one-time impact through the payment of arrears, which will lead to increase in demand for consumer durables.

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Tuesday 18 August 2015


DECIDED ON: 05.08.2014
 W.P.(C) 4131/2014

UNION OF INDIA AND ORS ..... Petitioner

Through: Mr R.V. Sinha and Mr R.N. Singh,

Advs. for the petitioner.
Mr S.K. Gupta, Mr Vikram Singh and Mr Shoib
Shakeel, Advs for respondent.




1. The petitioner-Union of India challenges an order of the Central
Administrative Tribunal (CAT) dated 21.12.2012 in which the
respondent-applicants’ claim for retention of the Modified Assured
Career Progression (MACP) Scheme benefits, in terms of the Central
Government’s Circular of 28.06.2011, and the proposal to
withhold/withdraw it, was considered.
2. The brief facts of the case are that the respondent-applicant was
initially a Group ‘D’ employee who was subsequently appointed as
Postal Assistant; the petitioner applied the Time Bound One
Promotion (TBOP) Scheme and the Biennial Cadre Review (BCR)
W.P.(C) No. 4131/2014 Page 2
which enabled the respondent-applicant to avail of financial
upgradation. The third, financial upgradation, on account of MACP
Scheme was granted, but subsequently sought to be withdrawn, on the
basis that mobility from Group ‘D’ to Postal Assistant was on account
of promotion. The respondent-applicant contended that this mobility
or upgradation was done on account of direct recruitment and not on
promotion and that as a result, he was entitled to the MACP benefit of
third upgradation.
3. The CAT, in its order, considered the argument and was
influenced by its Jodhpur Bench decision in Bhanwar Lal Regar v.
Union of India & Others in OA No. 382 of 2011. It further noticed
the decision of the Supreme Court in Director General, Rice
Research Institute, Cuttack & anr v Khetra Mohan Das, 1994 (5)
SLR 728, which examined the meaning and scope of the expression
“promotion”. Further decisions such as State of Rajasthan v.
Fatehchand Soni, (1996) 1 SCC 562 and other judgments were also
taken into consideration. On the basis of the judgments cited, the
CAT partly allowed the respondent’s application and directed as
“20. Therefore, the OA is only partly allowed, and it is
held that while the respondents were wrong in counting
the applicant’s selection as a Postal Assistant through
LDCE in the year 1976 as promotion/financial
upgradation, they would be free to once again examine
the case of the applicant, and in case any extra financial
benefits, not admissible to him, have been granted to him,
for the less than three months’ period from 05.07.2011,
W.P.(C) No. 4131/2014 Page 3
the date of his substantive norm-based promotion to the
LSG Cadre, to the date of his superannuation on
30.09.2011, the same may be recovered from his retiral
benefits, after giving him a due notice in this regard.
Therefore, the OA is only partly allowed, as above, but
there shall be no order as to costs.”
4. The petitioner-Union of India is aggrieved by the impugned
order to the extent it holds that movement from Group ‘D’ post to the
post of Postal Assistant is direct recruitment; it is argued that such
movement is in fact, a “promotion”. It is contended that the order of
Jodhpur Bench in Bhanwar Lal Regar (supra), has been stayed by the
Jodhpur Bench of the Rajasthan High Court. He also stressed that the
judgment in Bhanwar Lal Regar (supra) itself has been differed from
by the CAT in another Bench’s decision.
5. Learned counsel highlighted that in terms of the Rule, a clear
distinction had been made between recruitment of outsiders and those
within the department. Learned counsel relied upon Rules for
Recruitment to the Clerical Service in Post Office in the Indian Posts
and Telegraphs Department, especially Rule 3, 4 and 5 (which are
produced at page 157 of the paper book), and urged that these Rules
clearly indicate that a differential treatment is accorded to the
departmental candidates and outsider candidates. This distinction has
to be kept in mind while determining whether entry to the cadre of
Postal Assistant was by way of promotion or direct recruitment. Great
stress was laid on the fact that the eligibility condition for
departmental candidates and outside candidates stipulated different
W.P.(C) No. 4131/2014 Page 4
age limits, which indicates that both are not part of the same category
and that departmental candidates are, in fact, to be promoted to the
cadre of Postal Assistant.
6. Learned counsel for the respondent submitted that a look at the
rules would clarify that apart from departmental candidates and direct
recruits being part of the common pool eligible for the recruitment, no
other criterion of promotion such as that of seniority or selection, has
been carved out. It is submitted that both the categories have to
compete through an examination and then even though eligibility
threshold in terms of age limit for departmental candidates is 30 years
(as against 23 years for direct recruits), that alone would not be a
relevant factor. Counsel urged that, taking these into consideration, the
conclusion of the CAT that entry to the cadre of Postal Assistant, was
by way of direct recruitment should not be interfered with.
7. To the extent they are relevant, the Rules are extracted below:
“3-Recruitment-Recruitment will be by a competitive
examination which will be open to-(a) Departmental
officials of all classes below the clerical cadre in the post
offices hereafter called departmental candidates, and
(b) Outside candidates.
4-Condiitons for departmental candidates: A
departmental candidate should have put in not less than
five years unblemished service followed by confirmation.
He must submit his application in the prescribed form in
due time to the Head of Circle through his immediate
superior. It will be at the discretion of the Head of the
W.P.(C) No. 4131/2014 Page 5
Circle whose decision will be final, to permit the
applicant to appear for the examination.
5. Conditions for outside candidates- The following
conditions will apply to outside candidates:
(a) A candidate must be-
(i) a citizen of India, or
(ii) a subject of Sikkim, or
(iii) a person who has migrated from Pakistan with the
intention of permanently settling in India, or
(iv) a subject of Nepal or of a Portuguese or French
possession in India, and if he comes under category (iii)
or (iv), must be a person in whose favour a certificate of
eligibility has been given by the Government of India. A
candidate in whose case such a certificate is necessary,
may however, be admitted to the examination and he may
also be provisionally appointed subject to the necessary
certificate being even tally given to him by the
(b) He must not be less than 18 years of age and not
more than 23 years of age on the date of commencement
of examination referred to in rule 3.
Exception-I- In regard to Muslims, other Minority
Communities and scheduled Classes (Depressed Classes)
the upper age limit is 22 years.
Exception-II-Departmental candidates referred to in
rule 3(a) above who are not over 30 years of age, are
permitted to appear at the examination as outside
candidates, if they fulfil all other conditions prescribed
for outside candidates. They will not in that case be
allowed to compete for the 50 per cent of the vacancies
reserved for departmental candidates.
W.P.(C) No. 4131/2014 Page 6
(c) He must have passed at least the Matriculation
examination of a recognized university, or one of the
equivalent examinations detailed in Appendix No. 3
(d) He must apply in prescribed form.
(e) Female candidates can appear for the competitive
examination on the same conditions as male candidates
5-A candidates who are permitted to appear for the
examination will receive from the Head of Circle a
written order which should be produced before the
Supervisor in charge at the time of examination.
5-B Candidates, both departmental and outsiders, must
a fee of Rs. 4 which will be refunded if they are not
allowed to sit at the examinations.”
8. There is no magic in the use of the expression “Promotion” or
“Direct Recruitment”; whether, in fact, the mode of entry to the
service is through direct recruitment or promotion would certainly be
dependent on facts of each case and the structure of the Rules. If one
analyzes Rule 3, it would be apparent that recruitment is through “a
competitive examination which will be open” to both departmental
candidates and outside candidates. During the course of submissions,
the Union of India has emphasized that syllabus for departmental
candidates was prescribed in 1964; even this fact nowhere indicates
that a differential treatment is accorded to direct recruits who are
drawn from the open market. The absence of any clearly stipulated
and defined feeder post for promotion by way of seniority, or any
other known method like seniority-cum-merit, selection etc., the mode
prescribed in Rule 3 (a) (i.e., departmental candidates also having to
W.P.(C) No. 4131/2014 Page 7
qualify in the competitive examination, along with outsiders) in this
Court’s opinion clinches the matter. To that effect, the CAT’s decision
that the entry of departmental candidates to the cadre of Postal
Assistant is by way of direct recruitment is unexceptionable. We
consequently affirm the findings of the CAT in the impugned order.
9. For the above reasons, no interference is called for with the
impugned order of CAT.
The petition is accordingly dismissed.
AUGUST 05, 2014