The Union Cabinet on Wednesday cleared modifications in the Seventh Central Pay Commission recommendations on pay and pensionary benefits.
"Cabinet approves modifications in the 7th Central Pay Commission recommendations on pay and pensionary benefits," Finance Minister Arun Jaitley told the media.
The approval will result in additional benefits to over 55 lakh pre-2016 civil and defence pensioners and family pensioners.
In June 2016, the Cabinet cleared implementation of the recommendations with an additional financial cost of Rs 84,933 crore for 2016-17 (including arrears for two months of 2015-16).
The benefits of the proposed modifications will come into effect from January 1, 2016, the date of implementation of 7th Central Pay Commission. Post Cabinet nod, the annual pension bill of the Central Government is likely to be increased to Rs 1,76,071 crore.
The approval comes after the Ashok Lavasa Committee on Allowances submitted its report to Finance Minister Arun Jaitley on April 27. The Committee was formed to review the recommendations of the Seventh Pay Commission.
The pay commission had recommended abolition of or subsuming of allowances like acting, assisting cashier, cycle, condiment, flying squad, haircutting, rajbhasha, rajdhani, robe, shoe, shorthand, soap, spectacle, uniform, vigilance and washing.