7th Pay Commission Advances

7th Pay Commission Compendium Rules on Salary Advances to Central Government Employees

7th CPC Allowances pdf | List of advances abolished in 7th CPC

Lending a specific amount of money without interest in order to tackle the expenses to celebrate the festivals.

Good News for Central Government Employees!

Festival Advance Scheme Again Implemented!

Rs. 10000 Special Festival Advance for Central Govt employees

Special Festival Advance Scheme is being revived as a one-time measure. All central govt. employees can now get an interest-free advance of Rs. 10,000, recoverable in a maximum of 10 installments.

Lending a specific amount of money with a meager interest to buy a computer or two-wheeler.

The 7th Pay Commission suggested abolishing all Interest-Free advances except Travelling Allowance Advance, LTC Advance, and Medical Treatment Advance.

The 7th Central Pay Commission recommended in its report that generally salary advances are classified in two segments such as interest-free and interest-bearing advances. The rate of interest on advances are being notified by the Government of India from time to time and the interest rates are prescribed for each financial year.

Interest-Free and Interest bearing Advances are given below:

Interest-Free Advances

• Festival Advance
• Travelling Allowance Advance
• LTC Advance
• Bicycle Advance
• Warm clothing Advance
• Medical Advance
• Hindi course Advance
• Flood Advance
• Pay on Transfer Advance
• Leave Salary Advance

Interest Bearing Advances

1. Scooter Advance
2. Computer Advance
3. Typewrite Advance
4. Car Advance
5. House Building Advance

Interest-Free is given below after the 7th Pay Commission…

• The advance of Travelling Advance on Tour/Transfer
• The advance of the Leave Travel Concession
• Advances of Medical Treatment

Interest bearing Advances are given below after the 7th Pay Commission…

• Personal Computer Advance
• House Building Advance

Personal Computer Advance

The eligibility of personal Computer Advance for all Central Government Employees is Rs. 50,000 or the actual price of the PC, whichever is lower.

Interest Rate for Personal Computer Advance

The interest rate for the advance is 11.5%. The calculation of interest rate for the advance and repayment method is explained in another article. The computer advance will be allowed a maximum of five times in the entire service.

What is Festival Advance?

This festival’s interest-free loan is intended to meet the unexpected expenses incurred during the festivities. The 7th CPC suggested abolishing the advance. Most of the employees are seeking modification in some advances in the 7th CPC. The NC JCM has also insisted on the Govt to restore the advance.

Rate of Interest for Advances

2015-16
Rate of Interest for Personal Computer Advance: 11.5%

2014-15
Rate of Interest for Motor Car Advance: 11.5%
Rate of Interest for Other than Motor Car Advance: 9%

2010-11
Rate of Interest for Motor Car Advance: 11.5%
Rate of Interest for Other than Motor Car Advance: 8%

2008-09
Rate of Interest for Motor Car Advance: 11.5%
Rate of Interest for Other than Motor Car Advance: 9%
Rate of Interest for Bicycle Advance: 5.5%

How to Calculate Interest for Personal Computer Advance

The formula for calculating the interest amount for personal computer advance is  N/2 (A+1) x R/100 x 1/12

If an employee received Rs.30,000 as Computer Advance and he paid Rs. 500 per month with 60 installments:

61/2 (30000) x 11.5/100 x 1/12 = 8769

7th Pay Commission Recommendations on Advances

The 7th Pay Commission has recommended that the two types of advances are granted to government employees: Interest-free and Interest-bearing, there is a general demand from the JCM-Staff Side to increase all interest-free advances to three times their present value.

Analysis and Recommendations: As can be seen from the table above, the amount of most of the advances is quite low. With the increased salary packages provided after successive Pay Commissions, these advances have lost their relevance.

Hence, to do away with outdated provisions and thereby save on the costs involved in administering these advances, it is recommended that all Interest-free advances should be abolished.

Interest-bearing Advances: Analysis and Recommendations

The present position is that meager funds are allotted for these advances and only a few manage to avail this facility.

In fact, budget provision for all of them, except Advance for purchase of Personal Computer, has been reducing over the years.

Regarding Motor Car Advance and Motor Cycle/Scooter/Moped Advance, we are of the view that quite a few schemes for the purchase of vehicles are available in the market from time to time.

The employees should avail of these schemes and both these advances should be abolished.

The first priority has to be given to House Building Advance, the entitlement amount for construction or purchasing flats is sanctioned very less amount and rules and regulations should be revised and relaxed to purchase land (vacant land) on HBA.

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List of Abolished Advances after 7th Pay Commission

Government of India decision on 7th CPC recommendations on Advances to Central Government employees

• Bicycle Advance – Abolished
• Warm Clothing Advance – Abolished
• The advance of Pay on Transfer – Abolished
• Festival Advance – Abolished
• Natural Calamity Advance – Abolished
• The advance of Leave Salary – Abolished
• Advance for Law Suits – Abolished

7th CPC Advance: Government Servants who die while in Service

The amount of an advance to the families of Government Servants who die while in Service which may be granted under Rule 79 shall not exceed Rs.25,000 – Orders issued

Recent top developments on 7th Pay Commission Advances

The NC JCM Staff side raised the point and Govt have denied it.

ADVANCES (6th Pay Commission)

Interest-bearing Advances

Interest-free Advances

ADVANCES (5th Pay Commission)

Interest-bearing Advances

• 34 times basic pay + DP or
• A maximum of Rs. 7.5 lakhs or
• Actual Cost or
• Enlargement, 1.8 lakh max. or
• Cost of Enlargement or
• Rural case, 80% of the cost or
• Repaying capacity

Interest-free Advances