In a bid to downsize the government, the Union Cabinet on Tuesday approved a voluntary retirement scheme (VRS) for “surplus” employees. The Cabinet, however, did not approve the proposal for retrenching employees refusing to opt for VRS.
As per the scheme, permanent government employees rendered surplus will be eligible for the VRS and will be offered an ex-gratia amount equivalent to emoluments (basic pay plus dearness allowance) of 35 days for each completed year of service and 25 days for each year of the balance service left until superannuation.
The government has also decided to give income-tax rebate on a portion of ex-gratia for which necessary amendments will be made to the Central Secretariat Services (CCS) Pension Rules, 1972.
According to the scheme, surplus employees who do not opt for VRS will be retrained and redeployed.
The note prepared for the Cabinet, circulated to reporters after the meeting, said surplus employees who do not opt for VRS will be retrained and redeployed and may be retrenched at the end of that period. However, law minister Arun Jaitley clarified later that the Cabinet had not approved the retrenchment plan. Asked if the employees would continue in the “surplus” pool, he said “it is an enabling provision”.
The scheme stipulates that ex-gratia payment to an employee opting for VRS would be subject to a minimum of Rs 25,000 or 250 days emoluments, whichever is higher. The total number of years counted for payment of ex-gratia will not exceed 33 years excluding any weightage that may be allowed for purpose of pension/commutation of pension and/or gratuity. The scheme also makes it clear that ex-gratia would not exceed the sum of the emoluments that the employees would draw at the prevailing level for the balance of the period of service left before superannuation.
In addition to the ex-gratia, the employees will also be eligible for normal retirement benefits as per the existing rules/orders.