It has been decided by the Indian government on Thursday following a meeting between labor ministry and state employee and employers, that employees of organized sector, now allowed to withdraw up to 20lakh rupees gratuity fund, which was Rs 10lakh up to this year. All the centers, unions and the representatives of industry were on the same page to increase the gratuity level up to 20 lakhs from 10 lakhs. Currently, a worker is only allowed to withdraw 10 lakh rupees, even if he/ she accumulate more than 10 lakhs as his gratuity fund.
A committee was formed to examine the allowances. They have finalized its report and submitted it to the government on 22nd February 2017.
The All India Trade Union Congress (AITUC) union also demanded the removal of other conditions for gratuity scheme. Till now the rule is that at least 10 employees in an organization are required and at least 5 years of service is required to become eligible for gratuity fund. The union has demanded to remove these conditions also. The union also demanded to raise the rate from 15 days wages per year to 30 days wages per year.
But the government has circulated the proposed amendment only deals with enhancing the ceiling of gratuity from 10 lakhs to 20 lakhs under section 4/3 of the Act.
All Central government employees are waiting for last 7 months to receive comparatively greater allowances under the seventh Pay Commission in their pay scales. The seventh Pay Commission recommendations have wrapped up, in June 2016 last year, but the employees are still waiting for the payments owed them i.e higher allowances. All the senior officials are saying that the news of higher allowances will be declared after five states assembly polls. The union pointed out that the proposed amendment in gratuity fund limit is being brought in line with the recommendations of seventh pay commission accepted by the Central government. Gratuity is calculated as= Last drawn salary by the employee × 0.577 × number of service years. And Salary means basic plus DA (Dearness Allowance).
Virjesh Upadhyay, Secretary of Bharatiya mazdoor Sangh(BMS) said “It was very logical to extend the ceiling from 10 lakh to Rs20 lakh and the labour ministry also did not have any objection,” and D.L. Sachdeva, secretary of the (AITUC) said that besides the gratuity ceiling hike, labour minister D Bandaru agreed to consider reducing the five years’ gratuity payment rule.
The union is of the view that the delay of eight months for employees covered under the Gratuity Act should not result in negatively affecting the interest of the concerned employees. Obviously, this is one of the best news to every government employee which brought a big smile on their faces but everyone is expecting for another good news as soon as possible about 7th pay commission recommendations. Maybe after 5 states election, Indian central government will bring another big smile.
