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    Proposals of the Association on Perquisites and Allowances

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    Proposals of the Association on Perquisites and Allowances

    Post by Admin on Thu May 14, 2009 7:02 pm

    The following is the text of the demand for Allowances and Perquisites submitted to the FCI Management on 5th May 2009. However, the submission of the demands does not mean that the same would be accepted in full and it is very much expected that there would be quite a few cuts effected at various levels.

    The issue is regarding payment of other allowances and perks to Executives in FCI upon revision of scales of pay w.e.f. 01.01.2007. The instructions of DPE were issued vide OM No.2(70)/08-DPE(WC) – GL-XVI/08 dated 26.11.2008 and further modified vide OM dated 02.04.2009.

    The proposal regarding revision of pay scales has already been sent to Ministry with the approval of the Board and the approval on the same is still awaited.

    As per the OMs issued by the DPE, the Board of the respective CPSE has been empowered to take a decision on the Allowances and Benefits to be provided subject to the limit of 30% of Basic Pay plus DA for Superannuation Benefits, and 50% of Basic Pay for other Allowances and Perquisites (other than DA, HRA and Special Allowances). For the purpose of other Allowances and Perquisites, a cafeteria Approach is to be followed.

    Accordingly, the following benefits may be provided to the IDA Executives of the Corporation.

    1. Dearness Allowance
    The existing pattern of 100% neutralization of Dearness Allowance should continue. Thus DA as on 1.1.2007 will become Zero with link point of AICPI base year 2001=100, which was 126.33 as on 01.01.2007. The periodicity of adjustment may be once in three months, as per the existing practice.

    2. House Rent Allowance
    HRA will be paid based on the population of the places/ cities of posting of individual executive as follows:
    Cities with population Rates of HRA
    50 lakhs and above (Classified as "X") 30% of Basic Pay
    5 to 50 lakh (Classified as "Y") 20% of Basic pay
    Less than 5 lakh (Classified as "Z") 10% of Basic Pay

    In cases where actual amount of HRA as per the prescribed rate is less than the actual amount of HRA drawn earlier by an officer, the difference would be allowed to be drawn by the officer as personal allowance until the difference is eliminated in course of time subject to the condition that the difference would be subsumed within the overall limit of 50% prescribed for other perks and allowances.

    3. Lease Accommodation
    Leased accommodation would be provided in lieu of HRA to officers posted on need base against application made by the Officer, where FCI own accommodation is not available. For the purpose of CTC, 30% of basic pay will be considered as expenditure on Housing.
    The ceiling of eligibility of leased accommodation will be 30% of basic pay at the maximum of the scale for cities up to 50-lakh population and 40% of basic pay at the maximum of the scale for cities above 50-lakh populations. Any amount of house rent of leased accommodation in excess of the admissible percentage (%) shall be recovered from the officers concerned as deduction from salary. The Income Tax liability for the employee arising out of lease accommodation would not be borne by the Corporation and would be borne by the Executive. Further, the Corporation would not be providing any facilities in the leased accommodation. Hence no licence fee may be recovered from the employee.

    4. Superannuation Benefit
    Superannuation Benefit limited to 30% of basic pay plus Dearness Allowance will be provided for the purpose of Contributory Provident Fund (CPF), Gratuity, Pension, Death Risk Cover, and Post superannuation medical benefits. The allocated percentage is apportioned as under:
    Benefit & Percentage of Basic & DA
    i. Contributory Provident Fund (CPF) 12%
    ii. Gratuity 4.16%
    iii. Pension 6%
    (payable as follows,
    A. Deposits to National Pension Scheme for Executives eligible to open an account under the NPS as on the date of issue of the orders;
    B. for other Executives, in case they already are a member of any recognized pension scheme, by way of reimbursement of deposits to such scheme;
    C. for others, by way of additional contribution to CPF)
    iv. Post Superannuation Medical Benefit 4%
    (by way of credit to the Medical Assistance Fund maintained by the Corporation)
    v. Death Risk Cover 3.84%
    (Reimbursement of premium on Pure Term Life Insurance policy with only Death incl. Disability Cover and Zero Survival Benefit)
    For the purpose of (ii) and (v) the Executive would have the option to avail the facility on either Quarterly or Annual basis. For the purpose of (v), the Executive would have the option to avail multiple policies subject to the overall ceiling.

    5. Special Allowances
    North East Allowance would be payable to the Executive posted in the North East Zone @ 12.5% of basic pay per month.
    Non Practicing Allowance would be payable to the Medical Officers as per existing practice.

    6. Other Allowances & Perquisites
    Out of the maximum ceiling of 50% of basic pay payable, infrastructures such as hospitals, schools, colleges, clubs etc. wherever created by the CPSE is required to be monetised on the value of recurring expenditure on maintaining and running such infrastructure. FCI does not have any such infrastructure facilities except the two holiday homes maintained at Goa and Puri on lease basis. The revenue expenditure on these two infrastructure, when matched with the total Basic pay of all employees, does not even come to 0.0001%. However, the present system of LTC benefit would continue and for this purpose, the same would be monetized at 3% of Basic Pay shall be treated as compulsorily adjustable perks & allowances.
    Therefore, the perquisites and allowances payable in the revised pay scales shall be subject to a maximum ceiling of 47% of basic pay following 'Cafeteria Approach'. The individual officers may choose as per their requirement, perks & allowances, from the perks listed below, and submit their option in the prescribed proforma which will remain applicable for a financial year. Change of options once exercised normally will not be permitted. However Officers who are promoted or transferred from one City Category (X, Y or Z) to another may be permitted to change & resubmit their option afresh. In case, an officer opts for any Reimbursement based benefit, then the option can be exercised for Allowances and Perquisites not exceeding 52% of basic pay, subject to the declaration that actual availment would be restricted to 47% of annual basic pay.
    The cafeteria approach of perks & allowances however will be regulated on the following presumptions:
    i) Normally the Perquisites & Allowances as per option given by concerned executive, to the extent permissible, shall be paid along with monthly salary without production of any further documentary evidence.
    ii) However, full Income Tax on such amount would be payable by the executive unless the payment is claimed by the executive in the form of Reimbursement on production of voucher/cash receipts or actual proof of expenditure incurred by an officer for the purpose the allowances were drawn.
    iii) In such case, the reimbursement of such perquisites & allowances shall only be permitted to the extent vouchers /cash receipts are submitted. Further, in such cases, only the actual amount of reimbursement would be considered for the purpose of 50% ceiling.

    Allowances & Perquisites under Cafeteria Approach

    Conveyance Allowance
    An Officer owning a motor vehicle & not availing facility of company's car/vehicle, may be allowed Conveyance Allowance/Reimbursement @ 15% of basic pay per month for a four wheeler and @ 10% of basic pay per month for a two wheeler. This would include cost of fuel, regular maintenance and payment of statutory taxes and insurance.

    Driver Allowance
    Officers owning a four wheeler may be allowed @ 10% of basic pay per month as Driver Allowance provided a driver is employed.

    Transport Subsidy
    Officers not availing Conveyance allowance, or the facility of Company's Car may be paid Transport Subsidy @ 15% of basic pay per month. Physically challenged officers may be allowed additional 5% of basic pay per month towards transport subsidy.

    Lunch Allowance through Meal Voucher
    Officers may be provided Meal vouchers equivalent to 7.5% of basic pay per month. The Vouchers shall be in multiple of Rs. 10 and above. Any amount in fraction for the purpose will be ignored. Officers posted in Z Category cities would have the option to avail cash Lunch Allowance in lieu of Meal Vouchers. However, Income Tax liability in such cases would be borne by them.

    Professional Development Allowance
    Executives will be allowed an amount equivalent to 2% of their basic pay per month for purchase of any number of professional books, encyclopedia, Manuals, Journals, Audio/Visual aid for enrichment of their professional knowledge.

    Re-imbursement of Professional membership Fees and Training Programmes
    Officers may be allowed 2% of annual basic pay per year for expenditures on membership subscription, attending conference, Seminars, workshops, Continual Training Programmes etc. organised by professional institutions.

    Mobile and Telephone Reimbursement including internet/data/SMS facility
    Reimbursement of Mobile and Residence Landline bills including charges for internet/data/SMS may be allowed subject to the following ceilings,
    CGM/ED - unlimited
    GM – 6% of basic pay per month
    AGM/DGM – 4% of basic pay per month
    Mgr – 2% of basic pay per month
    For this purpose, the Executive can avail the services of one or more service providers.

    House up keep Allowance
    An amount equivalent to 10% of annual basic pay per year may be allowed to the Officers for purchase of curtains, wall paintings/hangings, carpets, decorative materials, cutlery and other household appliances etc. and for purchase, repair or replacement of household furniture and other durables.

    Electricity Allowance
    Officers residing in Houses owned by them or their family members or rented houses or in Corporation owned/leased accommodation may be allowed Electricity Allowance limited to 2% of Basic Pay per month.

    Children Education Allowance:
    On the basis of a certificate issued from the educational Institution/College/School, executives may be permitted to draw Children Education Allowance for maximum of two children at the following rates per child per month:
    For Study in Schools (incl. Play Schools) @ 4% of Basic Pay
    For Study in College (incl. plus two level, UG Engg. And Medical) @ 6% of Basic Pay
    For PG Study in Professional Institutions/University. @ 8% of Basic Pay

    Hostel Allowance
    Executives whose children are studying at an out station (other than the Home town or place of posting of the Executive) and residing in Hostels/PG/Rented accommodation may be allowed for maximum of two children @ 5% of basic pay per child per month upto a maximum of two children.

    Family Maintenance and Disturbance Allowance
    An Executive who is posted away from his hometown and where the family is not residing with the officer may be allowed Family Maintenance Allowance @ 7.5% of his Basic Pay per month.

    Dress Allowance
    The officers may be allowed once in a year an amount equivalent to 5% of the annual basic pay as Kit/ Dress Allowance.

    Laundry/Washing Allowance
    For washing and maintenance of the Dresses & other usable clothing an amount equivalent to 2.5% of basic pay per month may be allowed to the Officers.

    Entertainment Allowance
    Executives would be allowed Entertainment Allowance for entertainment of guests and visitors at his residence or at any other place outside the office subject to the following ceilings,
    CGM/ED - 8% of Basic Pay per month
    GM – 6% of basic pay per month
    AGM/DGM – 4% of basic pay per month
    Mgr – 2% of basic pay per month

    Domestic Assistance Allowance
    Executives may be allowed an amount equivalent to 5% of basic pay per month as Domestic Assistance Allowance.

    Cook Allowance
    Executives may be allowed an amount equivalent to 2.5% of basic pay per month as Cook allowance.

    Birthday Gift Memento
    An Executive may be allowed reimbursement of the cost of any Gift Memento of his/her choice on the month of his/her birthday subject to the ceiling of 0.5% of annual Basic Pay. The actual amount of reimbursement would be considered for the purpose of 50% ceiling.

    Special Disability Allowance for Physically Challenged Officers
    Executives belonging to the physically challenged category may be allowed a special Disability Allowance @ 2.5% of the Basic Pay per month.

    Disability Allowance for dependent Children
    Executives having dependent physically/mentally challenged children may be allowed a special Disability Allowance for dependent children @ 2.5% of the Basic Pay per month.

    7. Effective Date
    The DPE OM dated 02.04.2009 provided that all Allowances and Benefits would be w.e.f. 26.11.2008 provided the Presidential Assent to the revision of Pay Scales is obtained within one month of the issue of the OM. The Corporation, with the approval of the Board, had forwarded the recommended Pay Scales to the Ministry in February 2009 itself. However, the same were under examination at the Ministry. Since the Corporation’s proposals were forwarded well within the prescribed time frame, the Ministry may be requested to take up with the DPE to allow the benefits of Allowances w.e.f. 26.11.2008 itself.

    Swarup

    Posts : 11

    Re: Proposals of the Association on Perquisites and Allowances

    Post by Swarup on Fri May 15, 2009 7:37 pm

    Thanks for the update.... Very Happy

    Swarup

    Posts : 11

    Re: Proposals of the Association on Perquisites and Allowances

    Post by Swarup on Fri May 15, 2009 8:07 pm

    [quote="Admin"]
    Allowances & Perquisites under Cafeteria Approach

    Mobile and Telephone Reimbursement including internet/data/SMS facility
    Reimbursement of Mobile and Residence Landline bills including charges for internet/data/SMS may be allowed subject to the following ceilings,
    CGM/ED - unlimited
    GM – 6% of basic pay per month
    AGM/DGM – 4% of basic pay per month
    Mgr – 2% of basic pay per month
    For this purpose, the Executive can avail the services of one or more service providers.


    Entertainment Allowance
    Executives would be allowed Entertainment Allowance for entertainment of guests and visitors at his residence or at any other place outside the office subject to the following ceilings,
    CGM/ED - 8% of Basic Pay per month
    GM – 6% of basic pay per month
    AGM/DGM – 4% of basic pay per month
    Mgr – 2% of basic pay per month


    Logic behind different % for different scales could not be understood.

    1. The overall benefit has to be 47% of the BP. Therefore, choosing a single allowance such as Entertainment Allowance would exhaust 8% of the 47% total limit for CGM/ED. But for Mgr, they still can opt for other allowances with the remaining 6%. Thus, lower the %, more the options of allowances.

    2. Since, higher officers are in higher scales, proposing a uniform % would still cause them to get higher amounts. For example, with a uniform rate of 4% as entertainment allowance for all officers, officer having BP of Rs.25000/- would get Rs. 1000/-, whereas, officers having BP of Rs.40000/- would get Rs. 1600/-, and so on.

    3. Regarding Mobile and Telephone Reimbursement allowance, if the same is installed as per official entitlement, i.e. if it is installed by the office for official purpose, it should not be counted as personal allowance. Since the proposed allowances are personal in nature, these have to be within the 47% ceiling, as prescribed by DPE. Thus, unlimited ceiling on telephone bill may not be permitted by DPE.

    Admin
    Admin

    Posts : 179

    Re: Proposals of the Association on Perquisites and Allowances

    Post by Admin on Sat May 16, 2009 12:40 am

    ED/CGMs are presently also allowed certain levels of entertainment allowance. in order to maintain the levels such % needs to be adopted. further, these are maximum limits if reimbursemnt route is adopted. the actual could be lower.
    Only telephone facility provided within office premises are excluded from the defination of perquisite. residence phone or mobile comes within the scope of perquisite even if utilised for official purpose.

    ranifci

    Posts : 2

    Re: Proposals of the Association on Perquisites and Allowances

    Post by ranifci on Tue Feb 23, 2010 2:19 pm

    What is the latest position on fringe benefits?Why so delay? May please reply

    satinathguha

    Posts : 2

    Re: Proposals of the Association on Perquisites and Allowances

    Post by satinathguha on Wed May 12, 2010 11:45 pm

    what will be the HRA who has been promoted on 1.1.2010 after receiving HRA on revised basic pay of AG-I as on 31/12/2009

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    Re: Proposals of the Association on Perquisites and Allowances

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