7th Pay Commission is recommended that all Interest free advances should be abolished.

7th Pay Commission is recommended that all Interest free advances should be abolished.

Advances

9.1.1 Two types of advances are granted to government employees: Interest-free and Interestbearing.

Interest-free Advances

9.1.2 Presently 12 interest-free advances are permissible. Their details are as follows:

Table 1: Interest-free Advances

S.No.

Name

Amount

Eligibility

Remarks

1

Bicycle Advance

₹4500

GP<=2800

Recoverable in

max 30 monthly

installments

2

Warm Clothing

Advance

₹4500

 

All Group C

employees posted at a

hill station either on

first appointment or

on transfer, for a

period of not less than

one year

Recoverable in

max 12 monthly

installments

 

3

Advance of Pay

on Transfer

1 month’s pay OR

2 months’ pay in case of

transfer due to shift of

HQ as a result of

government policy

All employees

transferred from one

station to another in

public interest

Recoverable in

max 3 monthly

installments

 

4

Advance of TA

on Tour/

Transfer/

Retirement

An amount sufficient to

cover the officials’

personal travelling

expenses for a month or

six weeks in case of

prolonged tours

All cases where TA is

admissible

 

The advance

shall be adjusted

immediately

after completion

of tour

5

Advance of TA

to the family of a

deceased

government

employee

Limited to 3/4th of

probable expenses

admissible under the rules

Same as for

retirement/transfer

 

 

6

Advance of LTC

Up to 90% of the fare

All eligible Central

Government

Employees

 

7

Advance of Leave Salary

An amount not exceeding

the net amount of leave

salary including

allowances for the first 30

days of leave after

deduction of PF, House

Rent, Income Tax,

Recovery of Advances,

etc.

All officials

proceeding on leave

for a period not less

than 30 days

Adjusted

against the

monthly salary

bills

8

Advance in connection with medical treatment

90% of the package deal

for specific major

illnesses.

₹10,000 for indoor

treatment or outdoor

treatment of 3 months or

less for cancer.

₹36,000 for treatment of

TB where duration is

more than 3 months

All Central

Government

employees except

Railway employees

 

9

Festival Advance

₹4500

GP<=4800

Recoverable in

max 10 monthly

installments

10

Advance in the event of natural calamity like flood, drought, cyclone, etc.

₹7500

All non-Gazetted

employees

Recoverable in

max 12 monthly

installments

11

Advance for training in Hindi through Correspondence Course

₹450

For those Central

Government

employees who

undergo training

through

correspondence course

conducted by the

Central Hindi

Directorate

 

12

Advance for Law Suits

₹500

All Central

Government

employees

Recoverable in

max 24 monthly

installments

Analysis and Recommendations9.1.3 There is a general demand from the JCM-Staff Side to increase all interest-free advances to three times their present value.

9.1.4 As can be seen from the table above, the amount of most of the advances is quite low. With the increased salary packages provided after successive Pay Commissions, these advances have lost their relevance. Hence, to do away with outdated provisions and thereby save on the costs involved in administering these advances, it is recommended that all Interest free advances should be abolished.

Interest-bearing Advances

9.1.5 The following four Interest-bearing advances are presently admissible:

Table 2: Interest-bearing Advances

S.No.

Name

Amount

Eligibility

Remarks

1

Motor Car Advance

₹1,80,000 on first occasion and

₹1,60,000 subsequently OR 8 months’

Basic Pay OR anticipated price of car,

whichever is least

Pay in the pay

band of ₹19,530

or more,

excluding GP

Recoverable in

max 200

monthly

installments

2

Motorcycle/

Scooter/

Moped Advance

₹30,000 on first occasion and ₹24,000

subsequently OR 4 months’ Basic Pay

OR anticipated price of Motorcycle/

Scooter/Moped, whichever is least

₹20,000 OR anticipated price of

Moped only, whichever is less if

pay<8560

Pay in the pay

band of ₹8,560

or more,

excluding GP

Recoverable in

max 70

monthly

installments

3

Advance for purchase of Personal Computer

₹80,000 on first occasion and ₹75,000

subsequently OR anticipated price of

PC, whichever is less

Pay in the pay

band of ₹19,530

or more,

excluding GP

Recoverable in

max 150

monthly

installments

4

House Building Advance (HBA)

34 months’ Basic Pay OR ₹7,50,000

OR Cost of House OR repaying

capacity, whichever is the least for

new construction/purchase of new

house/flat

For a new house, the cost ceiling limit

shall be 134 times the pay in the pay

band subject to a minimum of ₹7.50

lakh and a maximum of ₹30.00 lakh

relaxable up to a maximum of 25% of

the revised maximum cost ceiling of

₹30.00 lakh.

The maximum limit for grant of HBA

for enlargement of existing house

shall be 34 months’ of pay in the pay

band subject to a maximum of ₹1.80

lakh or cost of the enlargement or

repaying capacity, whichever is the

least.

All permanent

officials or

officials with at

least 10 years of

continuous

service

Recovery of

principal in

max 180

monthly

instalments

and Recovery

of interest in

max 60

installments

subsequently

The present position is that meagre funds are allotted for these advances and only a few manage to avail this facility. In fact, budget provision for all of them, except Advance for purchase of Personal Computer, has been reducing over the years, as can be seen from the graph below Analysis and Recommendations

7th-Advance

Regarding Motor Car Advance and Motor Cycle/Scooter/Moped Advance, we are of the view that quite a few schemes for purchase of vehicles are available in the market from time to time. The employees should avail of these schemes and both these advances should be abolished.

Regarding other interest-bearing advances, the following is recommended

S.No. Name of Advance Recommended Ceiling Recommendations
1 PC Advance ₹50,000 or actual price of PC, whichever is lower May be allowed maximum five times in the entire service.
2 HBA 34 times Basic Pay OR ₹25 lakh OR anticipated price of house, whichever is least The requirement of minimum 10 years of continuous service to avail of HBA should be reduced to 5 years.

 

If both spouses are government servants, HBA should be admissible to both separately.

 

Existing employees who have already taken Home Loans from banks and other financial institutions should be allowed to migrate to this scheme.

 

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