Under the 7th Central Pay Commission, there are two types of advances provided to government employees, i.e., interest-free and interest-bearing advances.
7th Central Pay Commission Interest-free advances
There were 12 interest-free advances provided to employees. These were as follows:
|Bicycle advance||Rs.4,500||Grade Pay (GP) less than or equal to Rs.2,800||Amount is recoverable in a maximum of 30 monthly installments|
|Advance for warm clothing||Rs.4,500||All Group C employees who have been posted at hill stations. The appointment should either be the first one or a transfer. The duration of the appointment should not be less than 1 year.||Amount is recoverable in a maximum of 12 monthly installments|
|Advance on pay at the time of transfer||Pay for 1 month or 2 months in the case of a transfer due to shift of headquarters||All employees who have been transferred from one headquarter to another||Amount is recoverable in a maximum of 3 monthly installments|
|Advance on travelling allowance for tour, retirement, or transfer||The amount will be enough to cover the employee’s travelling expenses for a month or 6 weeks||All situations where travelling allowance is provided||The advance will be adjusted when the tour is completed|
|Advance on travelling allowance for the family of a deceased officer||The amount is limited to 3/4th of the expenses admissible||Same as that for transfer or retirement|
|Advance of Leave Travel Concession (LTC)||Up to 90% of the travel fare||All government employees|
|Advance of leave salary||An amount that does not exceed the net leave salary amount. This includes allowances for the first 30 days of the leave. This amount is arrived at after the deduction of Provident Fund contribution, house rent allowance, income tax, and recovery of advances||All employees on leave for 30 days or more||The amount is adjusted against the monthly salary|
|Advance for medical treatment||90% of the deal for predefined major illnesses. Rs.10,000 is offered for indoor treatment of cancer for a period of 3 months or lesser. Rs.36,000 is provided for the treatment of TB when the treatment duration exceeds 3 months||All Central Government employees. The benefit is not offered to railway employees|
|Festival advance||Rs.4,500||GP is less than or equal to Rs.4,800||This amount is recoverable in a maximum of 10 monthly installments|
|Advance for natural calamities that include droughts, floods, cyclones, etc.||Rs.7,500||Non-Gazetted employees||This amount is recoverable in a maximum of 12 monthly installments|
|Advance for availing Hindi training through a correspondence course||Rs.450||Central Government employees who avail the training through a course conducted by the Central Hindi Directorate|
|Lawsuits advance||Rs.500||All Central Government employees||This amount is recoverable in a maximum of 24 monthly installments|
The amount for most of the interest-free advances were relatively low. Since the salary packages of employees were increasing, these advances did not seem to be very lucrative. Hence, there were demands to increase the interest-free advances so that they stand at three times the regulated value.
The following interest-bearing advances were offered to government employees:
|Advance for purchase of car||The lowest among the following amounts are offered:
||Employees in the pay band of Rs.19,530 or more. Grade Pay is excluded||This amount is recoverable in a maximum of 200 monthly installments|
|Advance for scooter, motorcycle, or moped||The lowest among the following amounts are offered:
||Employees in the pay band of Rs.8,560 or more. Grade Pay is excluded||This amount is recoverable in a maximum of 70 monthly installments|
|Personal computer purchase advance||Lowest amount among:
||Employees in the pay band of Rs.19,530 or more. Grade Pay is excluded||This amount is recoverable in a maximum of 150 monthly installments|
|House Building Advance (HBA)||*The lowest among the following for new house purchase or new construction:
||All permanent employees or those with at least 10 years of continuous service||
*For a new house, the upper limit for the cost is 134 times the pay of the employee according to the pay band. This is subject to a minimum limit of Rs.7.50 lakh and a maximum amount of Rs.30 lakh.
*The maximum limit for the HBA for extension of existing house is 34 months’ pay. This is subject to a maximum limit of Rs.1.80 lakh or the repaying capacity of the employee or the cost of extension of the house, whichever is lower.
From the above information, it was evident that the advances offered were low. It was also seen that all advances except that for the purchase of a personal computer were decreasing over the years.
7 CPC - Festival advance and other advances offered to Central Government employees removed
In October 2016, several advances offered to government employees were abolished according to the 7th Pay Commission recommendation. The following advances were hence, removed:
- Bicycle advance
- Advance of pay when the employee is transferred
- Festival advance
- Leave salary advance
- Warm clothing advance
- Advance for natural calamities
- Advance for lawsuits
- Advance for Hindi training through a correspondence course
Effectively, all interest-free advances were discontinued except that for medical treatment, travel allowance when the employee is on tour/transfer, leave travel concession, and travel allowance for the family of a deceased employee.
Amongst the interest-bearing advances, those related to the purchase of car and motorcycle/scooter/moped purchase have been discontinued.
There is also an amendment in the amount of advance offered to government employees for the purchase of personal computers. The advance amount is now the lowest among Rs.50,000 or the actual price of the computer. This advance is also offered a maximum of 5 times during the service of the employee.
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