Regarding the 8th Pay Commission, along with fitment factor, minimum salary and pension, the discussion on gratuity has also become very intense among the central employees. The employees' organization has demanded an increase in the maximum gratuity limit on retirement from ₹ 25 lakh to ₹ 75 lakh.
If this demand is accepted by the government, then employees can get up to 3 times more gratuity than the current limit. The National Council-Joint Consultative Machinery (NC-JCM), an organization of central employees, has given this important proposal to the 8th Pay Commission to increase the limit of gratuity.
NC-JCM demands ₹75 lakh gratuity
NC-JCM says that the maximum limit of retirement gratuity should be increased from the current ₹25 lakh to ₹75 lakh. If the government gives its approval to this demand, then employees who have been employed for a long time can get huge financial benefits at the time of retirement.
If understood in simple language, gratuity is a lump sum amount which is given to an employee in return for continuous service in an organization for a long time. Usually this amount is paid at the time of retirement or leaving the job. For many employees, this gratuity money becomes a major support for their living after retirement. That is why any change in the gratuity limit has a direct impact on the future retirement planning of the employees.
Know what are the current rules and why the demand for change arose
At present, the maximum limit of retirement gratuity for central employees is fixed at ₹25 lakh. This means that even if the amount calculated as per the current rules is more than ₹ 25 lakh, due to the current limit, the employee is paid only up to a maximum of ₹ 25 lakh.
Employee organizations are strongly demanding an increase in this limit. They argue that this limit of ₹25 lakh is now quite low considering the ever-increasing salaries, inflation and cost of living. NC-JCM believes that the living standards of the employees have become very expensive in the last few years, hence it is very important to change the limit of this benefit at the time of retirement.
Major changes proposed in the method of gratuity calculation
The demand of NC-JCM is not only limited to increasing the maximum gratuity limit, but is also about changing the formula for its calculation. The organization wishes that gratuity should be calculated on the basis of 25 working days of the month instead of 30 days.
Along with this, a demand has also been made to remove or increase the currently applicable maximum limit of 16.5 times the basic salary. That is, overall the organization wants that the employees should get maximum benefit in gratuity calculation. This demand is considered very important for senior employees who have served for decades.
Suggestions from other organizations and final decision of the government
Many other employee and pensioner organizations have also raised the demand for amendment in the gratuity rules in different suggestions given to the 8th Pay Commission. However, the demands of all unions are not the same. Some organizations have suggested raising the maximum limit of gratuity to ₹50 lakh, while the NC-JCM has made a major proposal to directly increase it to ₹75 lakh.
However, employees should keep in mind that the gratuity of ₹75 lakh has not been decided yet. At present, this is just a recommendation put forward by the employees organization before the 8th Pay Commission. The Pay Commission will now submit its final report to the government only after deliberating on the suggestions received from all parties, financial conditions and other economic aspects, after which the final decision will be taken by the Central Government.
If this demand of ₹75 lakh is accepted, it will prove to be the biggest ever reform in the retirement benefits of central employees. At present, employees will have to wait for the official decision on this proposal.