After 7th Pay Commission, introduction of bill to double gratuity cap approved!

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New Delhi: The Narendra Modi-led BJP government, on Tuesday, approved introduction of a bill in Parliament with the passing of which the maximum gratuity limit will be doubled to Rs 20 lakh for certain categories of employees, at par with the staff of the central government.

The Payment of Gratuity (Amendment) Bill, 2017, aims to double the maximum gratuity limit for employees in the private sector and in public sector undertakings/autonomous organisations under the government not covered under Central Civil Services (Pension) Rules, at par with central government employees, IANS reported citing an official statement.

The Payment of Gratuity Act, 1972, applies to companies/establishments with 10 or more persons. The present ceiling on gratuity under the Act is Rs 10 lakh.

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With the implementation of the 7th Pay Commission, in case of government servants, the ceiling was raised to Rs 20 lakh.

“Considering inflation and wage increase even in case of employees engaged in private sector, the government is of the view that gratuity should be revised for employees who are covered under the Payment of Gratuity Act, 1972. Accordingly, the government initiated the process for amendment to the Act of 1972,” the statement further read.

Meanwhile, the Central government employees are likely to get hike in basic pay as the National Anomaly Committee (NAC) is likely to meet soon to take a final decision on increasing the basic pay to Rs 21,000 from the recommended Rs 18,000 under the 7th Central Pay Commission (CPC).

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