Friday, May 27, 2016

Life insurance needs to be treated at par with NPS to achieve public policy goals

Pension products from the life insurance stable should also be included in the 80 CCD(2) window in line with NPS to qualify for additional tax deduction .

Life insurance: An attempt to build a pensioned society through only the National Pension System (NPS) is a good strategy but this approach should be widened to include other pension products to make it more attractive by removing the service tax from all pension products and not just NPS.

One of the key budgetary announcements this year from an insurance perspective was to bring down service tax on single premium annuities from 3.5% to 1.4%. This certainly will bring down the cost of such policies, the benefits of which can be enjoyed by life insurance customers.

Service Tax Parity

An attempt to build a pensioned society through only the National Pension System (NPS) is a good strategy but this approach should be widened to include other pension products to make it more attractive by removing the service tax from all pension products and not just NPS.

The Finance Minister has brought about disparity between the life insurance pension products and other pension products like NPS and EPF. In the absence of a widespread social security system in the country, the life insurance sector can play a critical role in building a pensioned society through its vast reach and having over 30 crore existing customers. Given the substantial reach of Insurance companies, the agenda of future social and financial security can be quickly implemented by leveraging the existing insurance base.

It would not be out of place to request for a similar service tax treatment in line with NPS. This can go a long way in supplementing the Government’s intent to promote pension and annuity across the nation.

There is therefore a strong case for the removal of the service tax component from all IRDAI approved life insurers who provide pension and annuity products in line with the NPS.

Special Tax Deduction limit for all pension plans.

Investments in NPS have been given a special tax deduction of up to Rs 50,000 under section 80 CC(D) of the Income Tax Act, which puts it at a vantage position in comparison to pension products in the life insurance sector. The Finance Minister should consider including all pension products and not just NPS in this exclusive limit of tax exemption.

Pension products from the life insurance stable should also be included in the 80 CCD(2) window in line with NPS to qualify for additional tax deduction . In the same vein, annuitants who receive the annuity income in their advanced years should also be able to receive tax free income in their hands.

Level playing in tax free withdrawal limit

There is a further regulatory gap with regards to the Life Insurance plans and the NPS. As per the budgetary announcements, 40% of the corpus of NPS will be exempted from tax obligations. The corresponding amount with regards to pension products of the life insurance sector stands at 33% as per IRDAI regulations. Pension products of this sector should be brought at par with the NPS by making 40% of the corpus tax free.

Separated tax limit for protection and long-term savings products

Finally, in a country that is short of social security and has a crying need to ensure protection and financial inclusion of its countrymen, there is a need for life insurance to be given its due importance as an instrument that can achieve public policy goals. Hence, we do believe that a separate window over and above Section 80C of the Income Tax Act should be created to the tune of Rs 1.5 lakh for protection and long-term saving instruments. Alternatively, a separate window for pure life risk policies, akin to health insurance, should be created.

In addition, the current regulation allows tax deduction only in cases where sum assured is 10 times that of annual premium. This puts additional cost burden on people in higher age bracket. It would be a good idea to align Income Tax regulations to IRDAI product regulations which allow minimum sum assured multiple of 7x in case life insured is above 45 years of age. Or Income Tax regulations may totally do away with sum assured multiple requirement and tax exemption criteria could simply be the policy tenure of 10 years or more.

Life Insurance industry can play a critical role in creating a secure and pensioned society. It is time the Finance minister gives a boost to the industry by providing tax benefits.

 The author is senior director and chief financial officer, Max Life Insurance

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CGHS doctors’ protest

Nagpur: Central Government Health Scheme (CGHS) doctors as well as the resident doctors of all the Government Medical Colleges (GMCs) in the state protested in different forms against the lowering of the non-practicing allowance (NPA) by the Central Pay Commission by wearing black ribbons on Thursday.

The NPA for the CGHS doctors is being brought down by from 25% to 20% while that of the resident doctors under bond period is being lowered from 30 to 25%.

The resident doctors in all the 14 medical colleges of state also wore black ribbons to register their protest.

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Retirement age of govt doctors to be raised to 65: Modi

Citing shortage of doctors, Prime Minister Narendra Modi today announced raising the age of retirement of government doctors to 65 years and said the Union Cabinet will give its nod to the decision this week.

In a rally to observe the second anniversary of his government, Modi said there is a need for more doctors across the country but it was not possible to fill the gap in two years of his government.

The decision will cover all government doctors whether serving under states or the central dispensation, he said.

“There is a shortage of doctors. In government hospitals, their retirement is 60 years in some states, 62 in some others. If adequate number of medical institutes were there, then we would have more doctors and would not feel the shortage. It is difficult to make doctors in two years but poor families cannot be forced to live without doctors.

“Therefore from Uttar Pradesh, I want to announce this to my countrymen that this week our government’s Cabinet will take a decision and the retirement age of our doctors, whether in states or government of India, would be made 65 years instead of 60 or 62,” he said.

It will allow doctors to serve patients and provide education for a longer period, he said, adding that his government is also working fast to have more medical colleges to have more doctors in the field.

Plea to serve poor pregnant women

Modi’s announcement came after he appealed to doctors to serve poor pregnant women for free on each ninth day of every month, saying it will contribute to his government’s efforts to deal with illness among the poor.

If one crore families can give up on LPG subsidy, then Modi said he is sure that doctors can serve poor expectant women for 12 days in a year, he said.

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Govt likely to table the 7th pay commission report before Cabinet next month; notification to come soon​​

New Delhi: Central government employees can expect to get some good news trickling in from government sources towards the end of June.

As per reports, the Finance Ministry is likely to table the 7th Pay Commission report to the Cabinet for approval in the last week of June.

The 7th pay panel headed by AK Mathur had recommended the minimum salary for central government employees at Rs 18,000 and maximum salary at Rs 2,50,000. As employees protested against the wage hike calling it the "lowest ever" raise, the government set up the Empowered Committee of Secretaries group to review the AK Mathur-panel's recommendations.

The Empowered Committee of Secretaries on the Seventh Central Pay Commission is expected to soon wrap up its report on the remuneration of government employees.

Sources added that even the Prime Minister's Office is keen on a favourable pay hike for the central government employees, so the panel is likely to recommend a minimum salary at Rs 24,000 and the highest salary at Rs 2,70,000.

Sources added that the government is exploring options for meeting the additional payout over and above what was recommended by the 7th pay panel. The payout could be substantial with salary hike and arrears adding up to a Rs 1.02 lakh crore burden on government finances.

Report add that once the report moves from the table of the empowered group of committee to the cabinet, there is no reason why the cabinet would inordinately delay it.

The Finance Ministry is keen that higher salaries reach government employees just before the festive season starting mid-August, as spurt in consumption during the festive period will have a domino effect on the economy.

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Thursday, May 26, 2016

Central govt staff stir over ‘pay anomalies’ from June 9

 KKN Kutty, national president of the Confederation of Central Government Employees and Workers, today said the employees of the Central government would stage a demonstration from June 9 onwards in case the “shortcomings in the seventh pay commission recommendations” were not rectified.

Kutty, while talking to mediapersons on the sidelines of the All India Trade Union Education Camp 2016 in Dehradun, said the seventh pay commission had recommended Rs 18,000 per month as minimum wage whereas it should be Rs 26,000 per month. “Thirty five to 40 per cent positions are vacant in the Central government departments which must be filled at the earliest,” he said while criticising the government for its outsourcing policy.

“Several issues are there which should be resolved. We have asked the Centre to hold talks with us before June 9, otherwise we will be forced to launch an agitation,” he said. He said it was wrong to link government employees with corruption. “It is in society and there should be a mechanism to check it,” he asserted.

Earlier, while addressing the All India Trade Union Education Camp 2016, Kutty called upon the Central government employees to work unitedly towards ensuring justice for them.

Another speaker, Venkatesh Ramakrishnan, said the liberalisation policies followed by the rise of communalism in the country had adversely affected the working class. He said the Central government employees were facing challenging times as they were being neglected.

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Instructions for applicants applying for General Pool residential accommodation (GPRA) under Lady Officers’ Pool.

No.12035/10/84-Pol.II (Vol. II)
Government of India
Ministry of Urban Development
Directorate of Estates

Nirman Bhawan,
New Delhi-110 108.

Dated the 5th May, 2016


Subject:Instructions for applicants applying for General Pool residential accommodation (GPRA) under Lady Officers’ Pool.

As per the provisions of SR 317-B-8 of the Allotment of Government Residences (General Pool in Delhi) Rules, 1963, ‘Lady Officers Pool’ is maintained separately for allotment of GPRA to married lady officers and single lady officers in the ratio of 2:1.`Married lady officer’ means a lady officer whose marriage is subsisting and who is not judicially separated from her husband. All other women employees fall in single lady
officer category.

2. But, it has been observed in many cases that at the time of applying in DE-II Form, a single lady officer apply under single lady category but after marriage of her, do not update her status in DE-II Form and gets accommodation in single lady officer category despite being married. This allotment violates the existing provisions of theAllotment of Government Residences (General Pool in Delhi) Rules, 1963.

3. Therefore, it is to inform that the following instructions should be followed strictly by the applicants applying under Lady Officers Pool and also by the Nodal Officer of the office of the applicant:-

a) The personal information furnished in DE-II Form by a woman employee has to be verified by the office of the applicant as to whether the employee is married or single at the time of submission of the Form as well as at the
time of acceptance of allotment of GPRA.

b) A single lady officer should update her records in DE-II Form as soon as she gets married and she will be included in the waiting list of married Lady Officers for the eligible type of accommodation and will get allotment of GPRA from married Lady Officer quota only. In case, a Lady Officer is found to have suppressed information of her marriage and gets an allotment of GPRA from single Lady Officer quota, the allotment shall be cancelled and appropriate action shall be taken as per rules.

(Swarnali Banerjee)
Deputy Director of Estates (Policy)
(2306 2505)

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7 TH PAY NEWS-Government expenditurer on CG employees and actual impact on government finances-Confederation

          There are various reports in the media about the impact of the 7th CPC recommendations on the common man and the government resources at large, the reports suggest that additional amount of    Rs  one lakh crores of public money has been spent for implementation of the 7th CPC recommendations for 35 lakhs central Government employees, Perhaps the strongest criticism of Pay Commission awards is that they play havoc with government finances and also  state government demand support to implement the 7th CPC recommendations. At the aggregate level, these concerns are somewhat exaggerated and which is totally wrong.

Let us examine the 7th CPC report vide para no 3.65 and 3.66 and the website of Government of India Ministry of Finance Department of Expenditure Pay Research Unit for Brochure on Pay and Allowances of Central Government Civilian Employees visit website :

The 7th CPC report para number 3.65 and 3.66

3.65 The total expenditure on pay and allowances for civil personnel of Central Government in the recent years is brought out in Table 9.

Table 9: Expenditure on Pay and Allowances


Amount(Rs crore )
51,664 80
As a percent of GDP  

The Commission has obtained details of expenditure from each ministry/department for up to FY 2012-13. Of the total expenditure on pay and allowances of Rs 1,29,599 crore for the financial year 2012-13.

3.66 The expenditure per capita on pay and allowances for Civil Central Government personnel for FY 2012-13 was Rs 3.92  lakh per annum i.e Rs  32666/- per month.

Add 35% DA for the period 1/4/2013 to 1/1/2016 average salary of Civil Central Government personnel as on 1/1/2016 at 125% DA which works around  Rs 37500/- per month (Rs 4.50 lakhs per annum ) without 7th CPC recommendations . ie Rs  1.57,000 crores
Add average 16% wage increase due to 7th CPC which works out to Rs 43500/- per month Rs  5.22 lakhs per annum) with 7th CPC  implementation .

Total Expenditure for 35 lakhs for Civil Central Government personnel for FY 2016-17 is around Rs 1,83,000 crores In respect of pensions expenditure for 55 lakhs pensioners amount is around  Rs 81,000/ crores as on 1/1/2016. which is against the revenue  receipts of Rs 19 lakh crores. The percentage of revenue receipt and wages is just around 13 % of the total revenue is spent on the wages and pension for the Central Government personnel. In fact it is just at 1.3 % of the GDP.

 This clearly shows that that the increase in impact for the government of India finances is just  below additional Rs  25,000/- crores not additional Rs 1,00,000/- crores as per the media reports.  

The 7th CPC recommendations’ impact need not give jitters to the government because the rise in government wages will amount to only 0.4 per cent of GDP.

One more aspect is that technically, the recommendations of a Central Pay Commission are only for Central Government employees and States are not bound to follow suit. Indeed, up to the 1980s, States constituted their own Pay Commissions and prescribed their own pay scales, based upon their fiscal capacity.

Let us not be carried over by the media or press reports, hence we should educate each and every employee for struggle and so that a decent wage hike is achieved.                                
                                          Comradely yours

                                          General Secretary       


Tuesday, May 24, 2016

Hyundai Motor India announces special offer for central government employees

The customers will get a benefit of Rs 7,000 on Grand i10 and Xcent and Rs 5,000 on i10 and Eon in addition to the existing promotional offers.

NEW DELHI: Hyundai Motor India on Tuesday has announced 20 Years Celebration offer exclusively for Central Government Employees. The customers will get a benefit of Rs 7,000 on Grand i10 and Xcent and Rs 5,000 on i10 and Eon in addition to the existing promotional offers. The Central Government Employees are significant prospective customers for Hyundai across urban and rural India.

Rakesh Srivastava, Senior Vice President, Sales & Marketing, HMIL, said, "Pride of India celebration offer is especially for the Central Government Employees who value Hyundai as a tried and trusted brand with very strong customer affinity. With this initiative, Hyundai aspires to increase its engagement towards becoming the lifetime partners of Central Government Employees."

This promotional offer will be supported by Hyundai Motor India's large sales and service network in the country with 449 dealers to support the sales and 1163 Service Points to fulfill service requirements of customers. The pre-owned certified car dealerships of Hyundai Motor India, 'H-Promise' has a wide presence of 386 dealerships across India.

The company recently conducted 'Mega Experience Hyundai Program' which will let Hyundai customers to experience the services and product. It will provide free 18 point check-up conducted at locations like, malls, residential societies, parking lots and petrol pumps.

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KV admissions to go online from 2017-18

‘It will be a convenient option for parents’

With increasing demand for admissions to Kendriya Vidyalaya schools, the Kendriya Vidyalaya Sangathan (KVS) has decided take the admission process online across the country from 2017-18.

Santosh Kumar Mall, Commissioner, KVS, who was in the city recently, said for the coming academic year, a pilot was conducted in Delhi where they called for online applications. He said that they had received 1.16 lakh applications for 8,760 seats.

Mr. Mall said the online application system will be a “convenient option” for parents as it would avoid long queues in front of schools. “It will also ensure transparency and eliminate the scope for manipulation in registration,” he said.

In Bengaluru region — which consists of 50 KV schools in Karnataka and Goa — the number of applications registered for the 2016-17 academic year was 29,117 for 5,000 seats, which is six times the demand. In some instances, the demand was nearly 22 times the number of seats. The highest number of applications was received in Malleswaram, with 2,657 forms for 120 seats.

Owing to the high demand, many KV principals in the city said that the general public are unable to get admissions to KV. “The only way they can get a seat is under the RTE quota, if they are eligible, or under the Member of Parliament quota and girl child quota. This is because we have to give preference to other categories such as Central government employees, Central government autonomous bodies, and State government employees,” a principal said.

In many schools, the State government employees themselves are unable to obtain a seat because of the demand, she said.

Online system will avoid long queues in front of schools. It will also ensure transparency and eliminate the scope for manipulation in registrationSantosh Kumar Mall,Commissioner, KVS


“Exemption from NEET (UG) for States only for a year” -PIB

Shri J P Nadda: Ordinances on NEET (UG) give it firm statutory support and backing to bring in transparency in examinations

“Lakhs of students stand benefitted through the Ordinances”

“Exemption from NEET (UG) for States only for a year”

Union Minister of Health and Family Welfare Shri J P Nadda stated here today that The Indian Medical Council (Amendment) Ordinance, 2016 and The Dentists (Amendment) Ordinance, 2016 are being promulgated to amend the Indian Medical Council Act 1956 and Dentists Act, 1948 respectively to provide for a uniform entrance examination for Undergraduate and Post Graduate admissions with a proviso that for UG admission for the year 2016-17 only, the State Govt. seats (both in Govt. and Private Medical Colleges) shall be exempt from the purview of NEET regulations if the State Government so opts.

Elaborating further, the Health Minister stated that NEET is being implemented from the current year itself for all UG admissions in all private institution in respect of their seats. The first phase has been conducted on 1st May 2016, and the second phase shall be held on 24th July, 2016, the Minister said. Only State Government seats in Government Medical Colleges and State Government seats in private institutions will have exemption (if the state Government concerned so opts) for the current year. He added that as the States of Tamil Nadu and Puducherry do not conduct an examination for entrance in its Medical and Dental Colleges, and instead admit students on the basis of marks obtained at Class XII examinations for their State Govt. seats, admissions in these States for the current year only, shall be as per present procedure being adopted by these two States.

Shri Nadda categorically clarified that the management quota seats shall be filled by the respective private colleges/associations of colleges and/or private universities/deemed universities through the NEET UG-2016 examination only, in all the States even for this year. He also said that from next year starting with PG examination in December 2016, NEET will fully apply without any exemption.

“The purpose of the Ordinances is to provide a firm statutory status to the concept of Uniform Entrance Examination for all undergraduate and post graduate admissions in Medical/Dental Colleges while providing a relaxation to the State Governments in relation to only UG admissions for this year [2016-17] in view of their difficulties”, stated Shri Nadda. He stated that the necessity of promulgating the Ordinances arose since the Hon. Supreme Court is in vacation presently and both Houses of the Parliament had adjourned sine-die by 13th May 2016. He further added that six States and one UT are already participating in the NEET this year, and the Ordinances will allow them as well as any other State which so opts to fill up their State Govt. seats from NEET for 2016-17 UG admissions.

The Union Health Minister said that the exemption to the State Governments from NEET is only for a year. This was strongly requested by the States at the meeting of the State Health Ministers held on 16th May 2016 where they cited the following reasons:

(i) State level examinations for admissions have already been conducted and students will have to appear for a second examination.

(ii) State examinations are also conducted in regional languages. It would be unfair to make all students take the examination in English/ Hindi, particularly when only two months are left for NEET phase II.

(iii) The syllabi for the State level examinations are different from the All India PMT, which is going to be the basis for NEET phase II examination.

The Health Minister added that the same was endorsed in the all-party meeting earlier this month where almost all parties reiterated that while they were all in –principle in favour of holding NEET, it would be prudent and in the larger interest of lakhs of students to allow the State Governments to continue with their existing procedures for filling up of UG seats for 2016-17 in respect to State Government seats.

The Ordinances address these concerns expressed by States and representatives of Political Parties, Shri Nadda pointed out. He added that it was the Government of India that had approached the Hon. Supreme Court in the matter with the Review Petition and strongly reiterated that the Government stands committed to NEET.


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