Dear Mr
Kishore,
All the points that you have made in your mail are quite valid and what is required is to make the Supreme Court recognize the justification for upgradation of pension on par with that done in the Central Govt while implementing Pay Commision recommendations every ten years.That is where our court craft and management of the Civil Appeals at the SC is very critical. Let us hope it happens on 23/9/2015.
You have made a remark that the there is no need for amendment of the Pension Rules 1995 considering the Court judgments in favour of pensioners.I beg to differ on that point.Once a structured Pension Rules 1995 have been notified by the GOI by way of subordinate legislation, where there are some provisions in the Rules against the Articles 14,16 & 21 of the Constitution in the opinion of the Supreme Court, the GOI has to use its powers under Sec 48 to amend the Pension Rules 1995, so that the Rules will conform to the Constitutional provisions.
As regards the estimated outlay of dues to pensioners on upgradation, it is true that on a conservative basis it was Rs 1068 cr as at 31/1/2012 & and about 1400 plus cr as at 31/7/2013. The trend indicated an increase of 19 to 20% per annum in the outlay.
All the points that you have made in your mail are quite valid and what is required is to make the Supreme Court recognize the justification for upgradation of pension on par with that done in the Central Govt while implementing Pay Commision recommendations every ten years.That is where our court craft and management of the Civil Appeals at the SC is very critical. Let us hope it happens on 23/9/2015.
You have made a remark that the there is no need for amendment of the Pension Rules 1995 considering the Court judgments in favour of pensioners.I beg to differ on that point.Once a structured Pension Rules 1995 have been notified by the GOI by way of subordinate legislation, where there are some provisions in the Rules against the Articles 14,16 & 21 of the Constitution in the opinion of the Supreme Court, the GOI has to use its powers under Sec 48 to amend the Pension Rules 1995, so that the Rules will conform to the Constitutional provisions.
As regards the estimated outlay of dues to pensioners on upgradation, it is true that on a conservative basis it was Rs 1068 cr as at 31/1/2012 & and about 1400 plus cr as at 31/7/2013. The trend indicated an increase of 19 to 20% per annum in the outlay.
When I looked at the Basic Pension particulars of Chandigarh
petitioners (all pre Aug-97 retirees), I noticed that their basic pensions were
80% above the mid-point basic pension which we assumed in our calculations. May
be the scale may be smaller for post July 1997 retirees. Probably the effect of
old pensioners having missed wage revision for over 10 years from 1973 to 1983
might have mostly retired at near the maximum of scales of pay.
Factoring this aspect, I made a crude guess of at least Rs3000/- cr as the possible outlay with a steep climb of AICPI also in recent 7 years.(148 slabs of DA were merged in 8/1997, slabs in 8/2002 & 154 slabs in 8/2007. But as at 1/8/2012, 441 slabs will have to be merged unless like in Banks they merge at 67 slabs less which they did from 1/11/2012*). So if we increase Rs 1400 cr by 50% and then take its accumulated value at 19.5% p.a(compounded) for 2 years upto July 2015, the total outlay will work out to about Rs 3000 cr.
On 10/12/ 2014, when we met Chairman at Hyderabad and enquired whether the additional outlay per annum may work out to Rs 150 cr, he responded by saying that it will be much more although he did not indicate the exact figure.
In the LIC Board Meeting, the then Chairman gave an estimated annual additional commitment of Rs 6 to 8 cr on a total arrears outlay of Rs 51.37 cr. If we apply even a 10% ratio of total outlay, the annual outlay may work out to Rs 300 cr.
I am open to correction if someone can give a more realistic estimate. May be LIC may come forth with its figures if the SC demands to know from them.
I thought I should share the above thoughts with you in response to your mail.
Regards.
C H Mahadevan
Factoring this aspect, I made a crude guess of at least Rs3000/- cr as the possible outlay with a steep climb of AICPI also in recent 7 years.(148 slabs of DA were merged in 8/1997, slabs in 8/2002 & 154 slabs in 8/2007. But as at 1/8/2012, 441 slabs will have to be merged unless like in Banks they merge at 67 slabs less which they did from 1/11/2012*). So if we increase Rs 1400 cr by 50% and then take its accumulated value at 19.5% p.a(compounded) for 2 years upto July 2015, the total outlay will work out to about Rs 3000 cr.
On 10/12/ 2014, when we met Chairman at Hyderabad and enquired whether the additional outlay per annum may work out to Rs 150 cr, he responded by saying that it will be much more although he did not indicate the exact figure.
In the LIC Board Meeting, the then Chairman gave an estimated annual additional commitment of Rs 6 to 8 cr on a total arrears outlay of Rs 51.37 cr. If we apply even a 10% ratio of total outlay, the annual outlay may work out to Rs 300 cr.
I am open to correction if someone can give a more realistic estimate. May be LIC may come forth with its figures if the SC demands to know from them.
I thought I should share the above thoughts with you in response to your mail.
Regards.
C H Mahadevan
*In case of Banks, the AICPI is taken as at 1st November of the previous year from the date from which the wages are revised.{Ed}
