7th CPC Report on Non-Practising Allowance (NPA)

7th Pay Commission Recommendations on Non-Practising Allowance (NPA) – 7th CPC proposes for reduced NPA at the rate of 20% of Basic Pay as against NPA of 25% paid presently

Rate of NPA:

Non Practicing Allowance (NPA), at the rate of 25 percent of Basic Pay, is paid to medical doctors occupying posts for which minimum qualification of a medical degree is prescribed. There are demands to raise this allowance to 40 percent of Basic Pay.

Analysis and Recommendations

The VI CPC had included a detailed rationale for the grant of NPA in its recommendations. Most of the reasons are still valid and there is no need to reiterate them here. However, in line with our general approach of rationalizing the percentage based allowances by a factor of 0.8, we recommend that NPA should be paid at the rate of 20 percent of Basic Pay, subject to the condition that Basic Pay + NPA should not exceed the average of Apex Level and the level of Cabinet Secretary.

7th CPC’s remarks on taking NPA for the purpose of calculating HRA

Currently, in the case of those drawing either NPA or MSP or both, HRA is being paid as a percentage of Basic Pay+NPA or Basic Pay+MSP or Basic Pay+NPA+MSP respectively. HRA is a compensation for expenses in connection with the rent of the residential accommodation to be hired/leased by the employee and is graded based on the level of the employee, and therefore should be calculated as a percentage of Basic Pay only. Add-ons like NPA, MSP, etc. should not be included while working out HRA.

Whether NPA can be taken in to account while calculating Transfer Grant

Presently NPA and MSP are included as a part of Basic Pay while determining entitlement for grant of CTG. The Commission finds no justification for doing so, as the expenditure and inconvenience involved in relocation on transfer/retirement is similar for all employees. Hence, no other add-ons should be allowed in Basic Pay while calculating CTG.