Tuesday, April 9, 2013

Modified Parity


Modified Parity
It was the V CPC which gave a concrete shape to the concept of parity in pensions of those retiring from service at different periods of time.  Though they opined that it would be ideal to recommend full parity straightaway, they however, refrained from doing so considering the financial constraints of the government to implement such a measure.  They enunciated a parity principle in para 137.21 of their report.  Under the above principle, they recommended full parity upto 1.1.86 and modified parity as on 1.1.96.  This recommendation was accepted by the government and implemented w.e.f., 1.1.96.  Full parity was granted to all those who retired prior to 1.1.86 and modified parity on 1.1.96 to all those who retired before this date.  The Commission desired that if the principle of parity enunciated by them was accepted and implemented, full parity should be taken upto 1.1.96 and modified parity as on 1.1.2006 at the time of implementation of VI CPC’s recommendations w.e.f., 1.1.2006.  The Commission had also observed that parity was an ongoing process and it should ultimately lead to full parity at the time of every revision.  They also observed that the process was initiated by the IV CPC and that they were carrying it forward. 

The V CPC had rejected the demand made before it  for fixation of pension on the maximum of the scale of pay in which the person retired irrespective of the length of  service and pay  as unreasonable and unjustified.  However, they conceded that there was force in the demand that the pension of a person on revision as per a pay commission’s recommendations should not be less than 50% of the minimum of the corresponding revised pay scale of the post in which he/she retired and  30% in case of family pension.  The intention of the commission in accepting the demand is that a person who retired in a given post prior to revision should not get less than 50% of the minimum of the revised scale of the post as pension on revision.  When the posts carrying the IV CPC pay scale of Rs. 1400 – 2300 were allotted the revised scale of Rs.5000 – 8000 w,e,f,, 1.1.96 (V CPC scale), the corresponding scale of pay of the posts in question should have been deemed as Rs.5000 – 8000 and not 4500 – 7000 since these posts were not allotted the grade of Rs.4500 – 7000 w.e.f., 1.1.1996.  To treat those who retired in these posts as having retired in the grade of 4500 – 7000 for the purpose of modified parity amounted to downgrading these posts.  The Commission might have recommended the scale of Rs.  4500 – 7000 as corresponding scale of 1400 – 2300 (pre revised), but the scale of pay actually implemented to the relevant posts w.e.f., 1.1.96 was the scale of Rs.5000-8000 and the same has to be taken as the corresponding scale for the purpose of modified parity.  Otherwise, it would not only strike at the very root of the principle of modified parity enunciated by the V CPC but also completely negates the same.  The government is not justified in treating differently those who retired prior to revision from those who retired after revision in the same post.   Thus parity principle as enunciated by V CPC had been violated in implementation.  If what the government has done is accepted, there can never be parity in pensions of those retiring in the same or equivalent posts at different periods of time.  This fact has been singularly missed by the government while justifying what they had done.

It may be seen from the table annexed to DOP & PW’s OM dated 28.1.2013, grade pay of Rs.4200 was taken for those who retired in the pre revised scale of Rs. 6500 – 10500 for the purpose of modified parity  while those in  service as on 1.1.2006 coming from this grade to PB 2 have been given grade pay of Rs.4600.  This indeed is gross discrimination striking at the very root of principle of modified parity as explained earlier. Grade pay of Rs.4200 was recommended by the VI CPC to the pre revised grades of Rs.5000 – 8000, 5500 – 9000 and 6500 – 10500 putting them together and working it out on the maximum of the last grade i.e.,Rs.10500 X 40% = Rs. 4200.  While implementing, the post of Rs. 6500 – 10500 was merged with that of Rs. 7450 – 11500 and grade pay of Rs.4600 was allotted.  On what analogy has the government treated the grade of Rs.6500 – 10500 for grade pay of Rs.4200 prior to 1.1.2006 and for grade pay of Rs.4600 after 1.1.2006?  Considered from any angle, taking grade pay of Rs.4200 for modified parity in respect of those  who retired in grade Rs. 6500-10500  prior to 1.1.2006 is irrational and devoid of any  logic and reasoning.      

While the objective of parity, full or modified, is to elevate the past pensioners to the level of present and future pensioners progressively bridging the gap between their pensions, the manner in which modified parity has been implemented at the time of V CPC as well as VI CPC in respect of some posts has gone completely contrary to the above objective in as much as in some cases as narrated above, posts have been treated as in lower grades  thus  widening the gap rather than bringing it down which is not the aim of modified parity.  What is the objective sought to be achieved through modified parity if the actual grades and grade pays implemented to the employees in service are not extended for past retirees of the same posts for this purpose?

To have a proper appreciation of the parity principle enunciated by V CPC and the background therefor, it is necessary to go through paras 137.13, 137.14, 137.15, 137.20 and 137.21 of the V CPC report which are reproduced here below.

 
137.13. While it is desirable to grant complete parity in pension to all past pensioners irrespective of the date of their retirement, this may not be feasible straightaway as the financial implications would be considerable.  The process of bridging the gap in pension of past pensioners has already been set in motion by the IV CPC when past pensioners were granted additional relief in addition to consolidation of their pension.  This process of attainment of reasonable parity needs to be continued so as to achieve  complete parity over a period of time.

137.14. As a follow up of our basic objective of parity, we would recommend that the pension of all the pre-1986 retirees may be updated by notional fixation of their pay as on 1.1.1986 by adopting the same formula as for the serving employees.  This step would bring all the past pensioners to a common platform or on to the IV CPC pay scales as on 1.1.1986.  Thereafter all the pensioners who have been brought on to the IV CPC pay scales by notional fixation of their pay and those who have retired on or after 1.1.1996 by allowing the same fitment weight-age as may be allowed to the serving employees.   However, the consolidated pension shall be not less than 50% of the minimum pay of the post as revised by V CPC, held by the pensioner at the time of retirement.  This consolidated amount of pension should be the basis for grant of dearness relief in future.  The additions to pension as a result of our recommendations in this chapter shall not, however qualify for any additional commutation for existing pensioners.  

137.15. While the work relating to revision of pension of pre 1.1.1986 retirees by notional fixation of their pay shall have to be undertaken by the pension sanctioning authorities to be completed in a time-bound manner, we suggest that the pensioners should be provided some relief immediately on implementation of our recommendations.  The pension disbursing authorities may be authorized to consolidate the pension by adding (a)basic pension; (b)personal pension, wherever admissible; (c)dearness relief as on 1.1.1996 on basic pension only; (d)interim relief (I and II)  and (e) 20% of basic pension.  The consolidated pension shall be not less than 50% of the minimum pay, as revised by the V CPC, of the post held by the pensioner at the time of retirement.  This may be stepped up by the pension disbursing authorities, wherever feasible, to the level of 50% of the minimum pay of the post held by the pensioner at the time of retirement.

137.20. We have given our careful consideration to the suggestions.  While we do not find any merit in the suggestion to revise the pension of past retirees with reference to maximum pay of the post held at the time of retirement, as revised by the V CPC, there is force in the argument that the revised pension should be not less than that admissible on the minimum pay of the post held by the retiree at the time of retirement, as revised by the V CPC.  We have no hesitation in conceding the argument advanced by pensioners that they should receive a pension at least based on the minimum pay of the post as revised by the V CPC in the same way as an employee normally gets the minimum revised pay of the post he holds.  We recommend acceptance of this principle which is based on reasonable considerations.   

137.21.  The Commission has decided to enunciate a principle for the future revision of pensions to the effect that complete parity should normally be conceded up to the date of last pay revision and modified parity (with pension equated at least to the minimum of the revised pay scale) be accepted at the time of each fresh pay revision.   The guiding principle which we have accepted would assure that past pensioners will obtain complete parity between the pre-’86 and post-’86 pensioners but there will be only a modified parity between the pre-’96 and post-’96 pensioners.  The enunciation of the principle would imply that at the time of the next pay revision, say, in the year 2006, complete parity would be given to past pensioners as between pre-1996 and post-1996 and modified parity b e given between the pre-2006 and post-2006 pensioners. 

The Hon’ble Principal Bench of CAT, New Delhi, in their Order dated 1.11.2011 in OA No.0655/2010 and others have observed in para 29(a) & (b) thereof as follows

‘Para 29 (a) – if the interpretation of the Government is accepted it would mean that pre-2006 retirees in S-29 grade retired in December, 2005 will get his pension fixed at Rs. 23700/- and another officer who retired in January 2006 at the maximum of the pay will get his pension fixed at Rs.27350/-.  This hits the very principle of the modified parity, which was never intended by the Pay Commission or by the Central Government;

Para 29 (b) – The Central Government improved upon many pay scales recommended by the VI CPC.  The pay scale in S-29 category was improved from Rs.; 39200-67000/- plus Grade Pay of Rs. 9000/- with minimum pay of Rs.43280/- to Rs.37400-67000/- with grade pay of Rs.10000/- with minimum pay of Rs.44700/- (page 142 of the paper-book).  If the interpretation of the Department of Pension is accepted, this will result in reduction of pension by Rs.4,00/- per month.  The central government did not intend to reduce the pension of pre-2006 retirees while improving the pay scale of S-29 grade’

A pre-2006 retiree in S-13 grade retired in December 2005 will get his pension fixed at Rs.8145 and another person who retired in January 2006 at the minimum of the revised pay will get his pension fixed at Rs.8345.  This hits the very principle of modified parity as recommended by VI CPC as well as accepted by the government of India as observed by the Hon’ble Principal Bench in para 29 (a)  of their order in respect of  S-29 grade.  What applied to S-29 grade applies mutatis mutandis to S-13 and other grades as well.  Similarly the observation made by Principal Bench in para 29(b) also equally applies to S-13 and other grades as the principle involved is one and the same.

The government’s policy in respect of modified parity should be to maintain parity in pensions of persons retiring in the same and identical posts before and after revision of pay scales.  The manner in which  modified parity is being implemented right from 1.1.96 onwards is resulting in denial of the same in respect of those retired in certain posts as explained  earlier.   Government’s action has resulted in down-grading those who retired earlier to revision by not taking the actual grades and grade pays implemented for corresponding posts for the purpose of modified parity.  The above mentioned order of the Hon’ble Principal Bench disapproved the above approach of the government and struck down their order as not in consonance with the concept of modified parity as enunciated by V CPC and carried forward in their recommendations by the VI CPC and accepted by the government.

In conclusion, it is submitted that the principle of modified parity will have been correctly implemented only if the improved/higher grades and grade pays implemented w.e.f., 1.1.96 and 1.1.2006  are  taken into consideration for modified parity and not otherwise.  All those who retired prior to 1.1.96 in posts carrying the IV CPC scale of Rs.1400 – 2300 which have been allotted the V CPC scale of Rs.5000 – 8000 have to be done justice w.e.f., 1.1.96 and 1.1.2006 by taking the minimum pay for them for modified parity as Rs.5000 and Rs.13500 respectively.  To illustrate the injustice done to these retirees, it is stated that a Head clerk in Rs.1400 – 2300 grade prior to 1.1.96 was allotted the grade of Rs.5000 – 8000 w.e.f., 1.1.2006 whereas while implementing modified parity at the time of V CPC, the minimum pay has been taken as Rs.4500 for modified parity on the untenable plea that the V CPC recommended corresponding grade of Rs.1400 – 2300 was Rs.4500 – 7000.  It was conveniently ignored in this connection that the revised grade for the post of Head clerk w.e.f., 1.1.96 was Rs.5000 – 8000.  How are the Head clerks who retired prior to 1.1.96 to catch up with those who retired in the same posts on and after 1.1.96 unless the actual revised grade is not taken into consideration for modified parity?  There is no doubt that the government had robbed the recommendation of its very spirit and essence.  Similarly those in grade of Rs. 1600 – 2660 in railways were allotted the V CPC scale of Rs.5500 – 9000 w.e.f., 1.1.96 and the same was taken for the purpose of modified parity to those who retired in corresponding posts before 1.1.96.  Now in the OM dated 28.1.2013 the corresponding grade is being shown as Rs.5000 - 8000.  In the case of Accounts staff, one grade higher was implemented w.e.f. 1.1.96 and the same was denied for modified parity as on 1.1.96 and the imbalance continues.  The same is the case in respect of several other posts, especially on Indian Railways. If higher grades and grade pays allotted from time to time for various posts are not taken into account, how are the past retirees going to get justice in respect of modified parity.  Will they not forever continue to lag behind with low pensions?  This is not the aim of V and VI CPCs in recommending modified parity. Further in the case of running staff on railways, the emoluments for computation of pension include basic pay plus pay element of running allowance.  The same has to be taken for modified parity to do them justice.

       Bharat Pensioners Samaj has to take up the above issue in right earnest and protect the interests of those denied modified parity in the correct spirit.  This issue should be dealt with independent of the issue of extension of the same fitment benefit to pre 1.1.2006 pensioners or application of one and the same factor for revision of pension of the homogeneous group of pre 2006 pensioners. 



Date: 4.4.2013.
M. Somasekhar Rao,
Vice-President/BPS/SZ

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