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April 28, 2001
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VRS benefits for central govt staff finalised

Subhomoy Bhattacharjee

The voluntary retirement scheme for central government employees proposes 35 days of salary for every completed year of service or 25 days for every remaining year of service, whichever is less.

A Cabinet note on the details of the scheme has been prepared by the department of personnel as a sequel to the Budget announcement by the finance minister. The note is silent on reducing the age limit for retirement for government servants to 58 years from the current 60 years.

The lump sum payment is likely to range between Rs 350,000 to Rs 400,000 for an employee who has put in about 20 years of service. This will be supplemented by full pension plus gratuity despite the employee not having completed the requisite number of years in service.

Sources at the department of post and telegraph said the package is comparable to those in public sector banks and definitely better than the VRS being offered by public sector companies.

While the lump sum payable will be far lower than in the public sector banks, it is compensated by a better pension plan that exists for government servants. Currently, pension is linked automatically to the inflation rate, which makes it far better than that available for banks. Most PSUs in any case do not have a pension plan for their employees.

Official sources said the government has decided to go slow on the VRS because of the impending Assembly elections. Also, there is a division within the Cabinet on the issue, with ministers like Ram Vilas Paswan and Sharad Yadav opposing any move for downsizing the government.

The department has not fixed any age limit for the employees declared surplus. Sources, however, said that the DoPT is in favour of extending VRS to all government employees. DoPT's stand is different from that of the finance ministry, which has favoured restricting VRS to only those employees from departments identified for closure by the Expenditure Reforms Commission.

Finance ministry officials say the financial burden of making the VRS open-ended will be too heavy. DoPT counters this by saying that the age limit can be restricted to 50 if there is a rush.

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