7th Pay Commission Report – Advances for Central Government Employees

7th CPC recommendations for abolishing 12 types of interest fee Advances for Festival, TA, Tour, LTC Advance, Leave Salary, etc.  Out of interest bearing advances, HBA and PC advance have been retained all other advances are to be abolished

7th CPC has submitted its recommendations to the Central Government to abolish interest free advances  which are Bicycle Advance, Warm Clothing Advance, Advance of Pay on Transfer, Advance of TA to the family of a deceased government employee,  Advance of LTC, Advance of Leave Salary, Advance in connection with medical treatment, Festival Advance, Advance in the event of natural calamity like flood, drought, cyclone, etc., Advance for training in Hindi through Correspondence Course, and Advance for Law Suits.

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

Interest-free Advances

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

Table 1 : Interest-free Advances

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

Analysis and Recommendations

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 Hence, to do away with outdated provisions and thereby save on the costs involved in administering these advances, it is recommended that all Interest-free advances should be abolished.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

The following four Interest-bearing advances are presently admissible:

Table 2 : Interest-bearing Advances

Analysis and Recommendations

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 35:

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:

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Source : Download 7th Pay Commission Report