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The Union Cabinet approved the implementation of Seventh Pay Commission recommendations yesterday. The Commission was tasked with reviewing and proposing changes to the pay, pension and efficiency of government employees. These recommendations will apply to 33 lakh central government employees, in addition to 14 lakh armed forces personnel and 52 lakh pensioners. This will take effect from January 1, 2016. 
Pay, Allowances and Pension of central government employees In relation to an employee, the Commission proposed to increase (i) the minimum salary to Rs 18,000 per month, and (ii) the maximum salary to Rs 2,50,000 per month. It also recommended moving away from the existing system of pay bands and grade pay, which is used to determine an employee’s salary. Instead, it proposed a new pay matrix which will take into account the hierarchy of employees, and their pay progression during the course of employment. The Commission also suggested that this matrix should be reviewed periodically, with a frequency of less than 10 years. The Pay Commission also suggested a linkage between performance and remuneration of an employee. For this, it proposed the introduction of performance related pay which will be based on an annual appraisal of the employee. In addition, it recommended that annual increments of an employee should be withheld, if he is unable to meet the benchmark required for regular promotion or career progression. The Commission also sought to abolish or merge some of the allowances that may be given to employees by various government departments. It suggested that, of the 196 allowances that exist, 52 should be abolished and 36 should either be merged under existing heads, or be included under proposed allowances. Some of these allowances involved payment of a meagre amount of close to Rs 100 per month. In addition, the rates of House Rent Allowance (HRA) were revised. The Commission proposed a methodology to increase the HRA rates every time the Dearness Allowance given to employees increased to 50% or 100%. Dearness Allowance is given to employees in lieu of increases in the cost of living, on account of inflation. The Commission had also proposed a new methodology for computing pension for pensioners who retired before January 1, 2016. This is aimed at bringing parity between past and current pensioners. As part of the new methodology, two options for calculation of pension have been prescribed, and the pensioner may opt for either one. Financial Impact on the government 
The implementation of the Seventh Pay Commission recommendations is expected to cost the government Rs 1,02,100 crore. Of this amount, 72% will be borne by the central government, and 28% by the railways. As a result, the overall expenditure is expected to increase by 23.6%, with a 16% increase in expenses on pay, 63% in allowances and 24% in pension. Addressing the issue of vacancy 
As of 2014, the central government had a job vacancy of 18.5%.[i] These vacancies may need to be filled or abolished, if required, to reduce redundancy.[ii] It may be noted that the Second Administrative Reforms Commission had observed that reducing the number of government employees is necessary for modern and professional governance. Further, it had expressed concern that the increasing expenditure on salaries of government employees may be at the cost of investment in priority areas such as infrastructure development and poverty alleviation.[iii] Inducting specialised personnel in the government The Second Administrative Reforms Commission had also observed that some senior positions in the central government require specific skill sets (including technical and administrative know-how).[iii] One way of developing these skill-sets is to recruit personnel directly into these departments so that they can over a period of time develop the required skills. For example, personnel from the Central Engineering Service (Roads) may aspire and be qualified to hold senior positions in the Ministry of Road, Transport and Highways or a body like the National Highways Authority of India. However, another view is that special skill-sets may be inducted in the government through lateral entry of experts from outside government. This will allow for widening of the pool of candidates and greater competition for these positions.[iii] The Second Administrative Reforms Commission had also recommended that senior positions in the government should be open to all services. The last Pay Commission’s recommendations, in 2008, led to an increased demand in the automobile, consumer products and real estate related sectors. With the Seventh Pay Commission’s recommendations expected to take effect from January 1, 2016, their impact on the economy and the consumer market will become known in due course of time. [i] Report of the Seventh Central Pay Commission, Ministry of Finance, 2015 http://finmin.nic.in/7cpc/7cpc_report_eng.pdf. [ii] “Union govt has 729,000 vacancies: report”, Live Mint, November 30, 2015, http://www.livemint.com/Home-Page/X6U6xFe5oR2pW4simMmAhK/Union-govt-has-729000-vacancies-report.html. [iii] 10th and 13th Reports of the Second Administrative Reforms Commission, 2008 and 2009.
According to news reports (see here and here), the Cabinet approved four Bills for discussion in Parliament. The Bills cleared for consideration and passing are: the Copyright (Amendment) Bill, 2010; the National Accreditation Regulatory Authority for Higher Educational Institutions Bill, 2010 and the Protection of Women against Sexual Harassment at Work Place Bill, 2010. It cleared the Universities for Research and Innovation Bill, 2012 for introduction in Parliament. In this post, we discuss the key provisions of the Bills and the recommendations made by the Standing Committee on Human Resource Development (HRD). The Copyright (Amendment) Bill, 2010 The Bill was introduced on April 19, 2010 in the Rajya Sabha and referred to the Standing Committee on HRD, which tabled its report on November 23, 2010. The government had attempted to pass it in the Winter session twice. However, the Opposition raised the issue of conflict of interest. The Rules of the Ethics Committee state that a MP has to declare his personal or pecuniary interest in a matter, which is under discussion in the Rajya Sabha. The MPs contended that the HRD Minister, Kapil Sibal, could not pilot the Bill without declaring his interest. They argued that his son was the lawyer for a music company which is party to a legal dispute with TV broadcasters to which the amendment would apply (see here for debate on the issue in Parliament). The Copyright Act, 1957 defines the rights of authors of creative works such as books, plays, music, and films. Two key amendments proposed in the Bill are: - Copyright in a film currently rests with the producer for 60 years. The Bill vests copyright in a director as well. - The Bill makes special provisions for those whose work is used in films or sound recordings (e.g. lyricists or composers). Rights to royalties from such works, when used in media other than films or sound recordings, shall rest with the creator of the work. (See here for PRS analysis of the Bill) Key recommendations of the Standing Committee: (a) Drop the provision that makes the principal director the author of a film along with the producer; and (b) Keep the provisions for compulsory licensing in line with the terms of international agreements. (See here for PRS Standing Committee Report summary) The National Accreditation Regulatory Authority for Higher Educational Institutions Bill, 2010 The Bill was introduced on May 3, 2010 in the Lok Sabha and referred to the Standing Committee on HRD, which tabled its report on August 12, 2011. This Bill is part of the government’s attempt to reform the higher education sector. The key objective is to provide an effective means of quality assurance in higher education. Presently, accreditation is voluntary. Higher educational institutions are accredited by two autonomous bodies set up by the University Grants Commission and the All India Council of Technical Education. The Bill makes it mandatory for each institution and every programme to get accredited by an accreditation agency. The agencies have to be registered with the National Accreditation Regulatory Authority. Only non-profit, government controlled bodies are eligible to register as accreditation agencies. (See here for PRS analysis of the Bill) The Standing Committee made some recommendations: (a) assessment for accreditation should start after two batches of students have passed out of the institution; (b) there should be specific provisions for medical education; and (c) registration to accreditation agencies should initially be granted for five years (could be extended to 10 years). (See here for PRS Standing Committee Report summary) The Protection of Women against Sexual Harassment at Work Place Bill, 2010 The Bill was introduced on December 7, 2010 in the Lok Sabha and referred to the Standing Committee on HRD, which tabled
its report on December 8, 2011. The Indian Penal Code covers criminal acts that outrage or insult the 'modesty' of women. It does not cover situations which could create a hostile or difficult environment for women at the work place. The Supreme Court in 1997 (Vishaka judgment) laid down guidelines to protect women from sexual harassment. This Bill defines sexual harassment and provides a mechanism for redressing complaints. The protection against sexual harassment is applicable to all women at the workplace. However, the Bill does not cover domestic workers working at home. (See here for PRS analysis of the Bill) The Standing Committee recommendations addressed issues of gender neutrality, inclusion of domestic workers and the modified definition of sexual harassment. (See here for PRS Standing Committee Report summary) The Universities for Research and Innovation Bill, 2012 The Bill was cleared by the Cabinet and is likely to be introduced in Parliament this session. It seeks to provide for the establishment and incorporation of Universities for Research and Innovation. These universities shall be hubs of education, research and innovation. Although an official copy of the Bill is not yet available, newspaper reports suggest that this is an omnibus law under which innovation universities (focused on specific research areas such as environment, astrophysics and urban planning) shall be established. In India, a university can only be set up through an Act of Parliament or state legislature. The Planning Commission’s Working Group on Higher Education report stated that these universities could be funded by the private sector as well. The government aims to create 14 innovation universities, which would be world class.
