Approval of introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament

Approval of introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament

Approval of introduction of the Payment of Gratuity (Amendment) bill, 2017 in the Parliament approval to introduce the Payment of Payment (Amendment) Bill, 2017 

Press Information Bureau

Government of India

Cabinet

12-September-2017 16:53 IST

Cabinet approves introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament

The Union Cabinet chaired by Prime Minister Shri Narendra Modi has given its approval for introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament.

The Amendment will increase the maximum limit of gratuity of employees, in the private sector and in public sector undertakings / autonomous organizations under government, which are not covered under CCS (Pension) rules, Central Government employees as well.

Background:

The Payment of Gratuity Act, 1972 applies to businesses employing 10 or more persons. The main purpose for enacting this Act is to provide social security to workmen after retirement, whether the retirement is a result of the results of the superannuation, or physical disability or the impairment of vital part of the body. Therefore, The Payment of Gratuity Act, 1972 is an important social security law to wage earning population in industries, factories and establishments.

The present upper ceiling on gratuity amount under the Act is Rs. 10 lakhThe provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972 with regard to granuity are also similar. Before implementation of 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs. 10 lakh However, with implementation of 7th Central Pay Commission, in case of government servants, the ceiling is now Rs. 20 lakhs effective from 1.1.2016.

Therefore, considering the inflation and wage increase even in case of employees engaged in private sector, the government is of the view that the entitlement of 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 Payment of Gratuity Act, 1972

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Letter information office

Indian government

The cabinet

12-Sep-2012 17:16 IST

Cabinet gives its approval for introducing the Payment of Payment (Amendment) Bill, 2017

Under the chairmanship of Prime Minister Narendra Modi, the Union Cabinet has given its approval to present the Substantial Payment (Amendment) Bill, 2017 in Parliament.

This amendment will increase the maximum ceiling of the contribution of the employees of public sector / autonomous organizations under private sector and government, which are not covered under the CCS (Pension) Rules, according to the employees of Central Government.

Background:

Substantial Payment Act, 1972 is applicable for the establishment of ten or more people. The main objective of this Act is to implement - Social retirement of workers after retirement, whether retired as a result of retirement rule or failure of vital body part, has been retired due to physical disability. Therefore, the Substantial Payment Act 1972 is an important social security legislation for the wage earning population in industries, factories and establishments.

Under the Act, the maximum ceiling on the contribution amount is 10 lakh rupees. There is a similar provision for central employees under the CCS (Pension) Rules, 1972 in relation to the issue. Before the seventh Central Pay Commission was implemented, the maximum limit under CCS (Pension) Rules, 1972 was 10 lakh rupees. However, with the implementation of the seventh Central Pay Commission, in the case of government employees, the maximum limit is now Rs 20 lakh from January 1, 2016.

Therefore, considering the inflation and salary increase in the case of employees working in the private sector, the Government now has a view that the eligibility of substance for employees included under the Payment of Payment Act, 1972 should be amended. Accordingly, the Government initiated the amendment process in the Payment of Payment Act, 1972.