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Arrears for pensioners to be paid in 3 instalments

CHENNAI, AUG. 1. The Chief Minister, Jayalalithaa, today announced that gratuity and commutation arrears of employees, who retired between January 1, 1996 and March 31, 1998, will be paid in three instalments with interest, starting this financial year.

In a statement here, she said a working group would be constituted to go into the determination of the commutation table and other issues relating to pension payment. She declared that two G.O.s on the commutation amount and encashment of earned leave of all those retiring with effect from April 1, 2003, would be cancelled.

The additional commutation, gratuity and arrears of pay and allowances of those who retired from service between January 1, 1996 and March 31, 1998 and the arrears of pay and allowances based on the recommendations of the Sixth Pay Commission of those who retired after March 31, 1998 were not paid in full by the previous the DMK regime, which deferred payment of 60 per cent of the arrears beyond 2003, "knowing that it would be an impossible task for the next Government to pay the arrears." The arrears, together with interest now accumulated to more than Rs.1,800 crores, Ms. Jayalalithaa said.

After examining the issue carefully, "with the intention of somehow tackling this massive financial problem" her Government decided to implement a scheme to settle the arrears, she said.

As for those who retired between January 1, 1996 and March 31, 2004, 60 per cent of the arrears of pay and allowances with interest worked out up to March 31, 2003 would be blocked in a non-interest bearing account from April 1, 2003 and paid in the form of small savings scrips in three annual instalments.

A total of 60 per cent of pay and allowances of those who were in service on April 1, 2004 would be retained in a non-interest bearing deposit account from April 1, 2003 and paid at the time of retirement in the form of small savings scrips in three equal annual instalments.

Ms.Jayalalithaa said the additional cost involved in making the arrear payments in the current financial year would be Rs. 355.44 crores.

Pension payments

The Government's pension payments increased from Rs.787.03 crores in 1995-1996 to Rs.3808 crores in the revised estimates of 2003-2004. She said this was "one of the major causes for the fiscal crisis." The working group appointed by the Reserve Bank of India gave its recommendations on making certain changes in the pension scheme, which were akin to the changes introduced by the State Government in March last, Ms. Jayalalithaa said.

The Government would constitute a working group to go into the determination of the commutation table and other issues relating to the pension payment. Pending receipt of the working group's report, the Government, in response to a plea of the employees and teachers, would cancel the revised commutation table announced in the G.O. Ms.No.135, Finance (Pension) of April 30, 2003, and pave way for calculation of commutation amount as per the earlier formula with effect from April 1, 2003.

Similarly, the Government decided to cancel G.O. Ms.No.72, Finance (Pension) of March 19, 2003, to enable encashment of earned and unearned leave totalling 330 days with effect from April 1, 2003.

The Government's gesture was aimed at motivating the employees and teachers to serve the people better, she said.

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