HBA - House Building Advance

HBA – House Building Advance

·         Significant changes were made in the HBA for Govt employees due to acceptance of 7^th Pay Commission.

·         Here are some important changes compared to previous rules

SN	Item	6th PC	7th PC
1	Maxmimum HBA Amt	7.5 Lakhs	25 Lakhs
2	Interest Rate	8.5%	6% to 9.5% for different slabs
3	Expansion of House	1.8 lakhs	10 lakhs
4	Cost ceiling limit of the House	30 Lakhs	100 Lakhs ( with a proviso of upward revision of 25% in deserving cases i.e., up to 125 Lakhs)
5	If both spouses are Govt employees	Only one spouse is eligible	Both spouses are eligible either jointly or separately
6	Provision of 2.5% higher interest rate above the prescribed rate	Existed	Withdrawn

Salient features of HBA (after 7^th PC)

·         HBA amount: Least of Rs. 25 Lakhs or 34 months basic pay or cost of House/Flat or Repaying capacity.

·         Expansion of House:  Least of Rs.10 Lakhs or 34 months Basic pay or cost of expansion or repaying capacity.

·         Cost ceiling limit of the House  - Rs.1 Crore ( with a proviso of upward revision of 25% in deserving cases i.e., Rs.1.25 Crores)

·         Both spouses, if they are Govt employees are now eligible for HBA either jointly or separately.

·         Migration:  Provision of migration of existing Housing loan from financial institutions/Banks to HBA is existed.

·         Second Charge:  Availing Second Charge on the house for taking loans to fund balance amount from Banks/financial institutions has been simplified. No Objection certificate will be issued along with the sanction letter of HBA, if employee applied.

·         Simple interest rate 8.5%

·         HBA is admissible to an employee once in a life time.

·         Penalty provision (for not complying the conditions)  of 2.5% (higher rate of interest) is withdrawn

·         Recovery of HBA:  Principle in 180 months (15 years) and Interest in 60 months (5 years)

·         The House/flat can be insured with the private insurance companies which are approved by IRDA – Insurance Regulatory Development Authority.  

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CEA - Children Education Allowance

CEA - Children Education Allowance

 

Clickfor Board's letter 114/2018

 

·         The Children Education allowance was introduced w.e.f. 1-9-2008 on the basis of the recommendation of 6th CPC.

 

·         7th Pay Commission revised the rates of CEA w.e.f 01.07.2017

 

	Normal children	Differently abled children
CEA	Rs. 2,250 per month (Rs. 27,000 per year)	Rs. 4,500  per month (Rs.54,000 per year)
Hostel Subsidy	Rs. 6,750 per month ( Rs.81,000 per year)	Rs. 13,500 per month (Rs.1,62,000 per year)

 

·         The CEA and Hostel Subsidy can be claimed concurrently.

 

 

·         The rates will be double for differently abled children

 

·         The above rates would be automatically raised by 25 %  - If the DA- Dearness Allowance goes up by 50 %

 

·         Reimbursement  - allowed once a year (not like every quarter in 6th PC)

 

·         The period year means Academic Year i.e., 12 months of complete academic session.  

 

·         Upper Age limit :  Normal children – 20 years and Divyaang children  - 22 years

 

 

·         To be claimed - only after completion of the financial year.

 

·         Biggest relief for claiming CEA is dispensing of producing fee receipts. A certificate from the Head of Institution will be sufficient for this purpose.

 

 

·         In case, both the spouses are Government servants, only one of them can avail the above allowances.

 

·         Admissible for classes from nursery to class XII only. (two years before class one).  

 

·         2 years diploma (polytechnic college /ITI/ Engineering college  - eligible.  Provided the child pursues the course after passing 10^th standard and CEA and Hostel Susbsidy has not been granted to the child in respect of 11^th class and 12^th class.                                                                                     

·         Reimbursement is allowed to only the two eldest surviving children of the Government servant (exceptions: 1. When the 2nd child birth is results in multiple births 2. The 3rd child is born due to failure of sterilization operation. )

 

·         No nexus /connection between performance of the child in his class and reimbursement of CEA /Hostel Subsidy.  In other words, even if a child fails in a particular class, he is eligible for both i.e., CEA and Hostel Subsidy.

 

·         However, if child is admitted in the same class in another school, though the child has passed out of the same class in previous school or in mid session  - CEA shall not be reimbursable.

 

·         Retirement, Death, dismissal, removal cases:  CEA & Hostel Subsidy shall be eligible till the end of the academic year in which the servant ceases to be in service.

 

Hostel Subsidy:

 

1.       Applicable only – minimum of 50 kms distance from the residence of the employee.

2.       In addition to the Certificate for Institution, a certificate should mention the amount of expenditure towards lodging and boarding in the Hostel is required.  The amount of actual expenditure mentioned or Rs.6750 per month (Rs.81000 per year) whichever is lower shall be paid.   

3.       Hostel subsidy is 3  times more than CEA.

 

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Debt Service Fund

Debt Service Fund

v  Created a new fund in the year 2013-14 year.

v  Object: To meet the liabilities for debt servicing of Japan International Cooperation Agency and the World Bank loans taken for the Dedicated Freight Corridor project and obligations of future Pay Commissions/Awards.

v  Allocation for the current year 2013-14 is Rs.4,163 Crores and Interest accrued on balance of the Fund is Rs.83.26 Crores (Total 4246.23 Crores)

v   Credits to the Fund:  A) From the net surplus (Railways' excess of receipts over expenditure) of the Indian Railways after appropriating the amounts to Development Fund and Capital Fund. B) Interest on closing balance of the Fund.

v   Debits to the Fund:  A) to meet committed liabilities of debt servicing for World Bank and JICA- Japan International Cooperation Agency loans for DFC B) Other future liabilities arise due to implementation of future Pay Commissions/Awards etc.

v

v  Importance:

A) Railways finances were burdened so much in the years 2008-09 and 2009-10 years due to implementation of 6th Pay Commission recommendations retrospectively from the year 01.01.2006 onwards. Also JICA and World Bank financing on very big scale the ambitious project of DFC - Dedicated Freight Corridor which is expecting the cost of Rs. 95,836 Crores. 

B) Western DFC (1,499 km) is being funded by loan from Japan International Cooperation Agency (JICA) to the extent of 77% of the project cost. Out of 1,839 km of Eastern DFC, 1,183 km of Ludhiana-Khurja-Dadri-Kanpur-Mughalsarai section is being funded through loan from World Bank to the extent of 66% of the project cost.

C) Unless contributing annually from the surpluses, the repayment of loans to the JICA and World Bank and meeting the 7th Pay commission obligations will be a major burden on the Railway Finances.  In order to prevent the huge burden on Railway finances, this Fund is created and planned to allocate the contributions from the excess of Receipts over Expenditure from 2013-14 year onwards.

v  During the year 2016-17 , Rs.3000 Crores from the Fund balances were utilised to meet 7th Pay commission arrears.  To accountal this, separate Classification/Allocation was enabled under all Demands (i.e., Demand No.4 to 13) - Sub Head 990 under Credits & Recoveries- Amount met from Railway Debt Service Fund Link is ACS128 to Finance Code II

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Way leave charges

WAY LEAVE CHARGES

RailwayBoard Link - Way Leave charges

• Authority: Section 16 & 17 of the Railways Act, 1989 and Para 1033 of Indian Railways Engineering Code (ACS No.47)

   Engineering Code - Way Leave charges Link

• What is Way Leave: Making good any interruptions caused by the Railway to the use of Lands through which the Railway (line) is made.  In many cases, these are unavoidable in view of the very nature and extent of the railway alignment.

• Granted Way leave as non-availability of any other means of access to properties/houses and non-feasibility of provision of water supply, electricity, sewerages, etc. from any other direction.

• Examples : Provision of way leave/easement on Railway land in the form of Passage to Private houses and establishments, underground pipelines for water supply and sewerage, electrical and telecommunication lines etc.

• Authority for Railways for facilitating such works: 
• Way leave facilities should not be granted as a matter of routine, but only after consideration of each case on merits based on a site inspection.

• Any proposal for passage/roads for width more than 3 metres should be treated under LICENSING and dealt accordingly.

• Way leave permission in respect of open drainage and surface/overhead pipelines should be allowed only in unavoidable cases. All efforts may also be made to have the existing open drainage and surface/overhead pipelines replaced by underground installations at the earliest.

Rates of way leave facilities:

• The rates for Way leave facilities is depend on the nature of the Work and to be fixed as per Railway Board's policy letter No. 97/LML/24/3 dated 27.11.2001.  Example: Laying of underground pipeline - 10 % of the market value of land p.a. subject to minimum of Rs.20,000/- p.a.

Precautions at the time of entering agreements

• Not conferring upon the party any right of possession or occupation of the land.  That means Way leave facility is only enables occasional or limited use of the land by a party for specified purposes like passage etc.

• Should not using the words "licence" and " licence fee" in Way leave agreements.  But only "permission" and "way leave charges" in such Agreements.

• Clearly stipulate that the Railway Administration retains full rights to enter upon, pass through or use of the land at any time, without any notice to the party.

• In the event of the way leave facility being discontinued with, the Railway will neither be liable to pay any compensation or reimburse any amount to the party, nor to provide any alternative arrangement for access, etc.  In such a case, removal of such underground pipelines etc are liable to be removed/shifted by the parties at their own cost.

• In any way, such Way leave facility does not impinge/interrupt the safety and security of railway operations and railway property.

• Registration fee:  A Deposit of Rs.20,000/- as fees to be paid along with application for way leave permission. This would be adjusted against the survey and detailed estimate charges/way leave charges.

Processing and sanctioning of way leave proposals

• Processed by Sr.DEN(Co-ord) and sanctioning by DRM (without any further re delegation) duly concurred by Divisional Associate Finance.

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Line Capacity Works

Line Capacity Works

(Most important question for General Expenditure - many times asked in exams)

v  Line Capacity means  - " The number of trains that can be run on a section in 24 hours."

.

v  Line Capacity Works means - "The works which are designed and provided in order to improve the Operating performance or to add to the Capacity of the Line."

v  Saturation means - " When a Section reaches 80 % of the utilization of Line Capacity, it is treated as reaching to 'Saturation'.

v  Methods - Increasing Line Capacity :-

1.       Proposals for New Marshalling yards or Major yard remodeling of the existing marshaling yards, Goods terminals and Transit yards etc should be preceded by the WORK STUDY.

2.       The existing capacity should be properly evaluated by preparation of Master charts for "Doublings, Multiple tracking schemes and Gauge conversion schemes."

3.       In the case of Passenger terminals : - Occupation charts of the platform lines, washing & stabling lines etc should be prepared and analyzed.

4.       In the case of Goods yards and Marshalling yards etc: - The capacity should be worked out in terms of average detention of trains etc.

5.       The optimum capacity with the existing facilities should first be worked out.  Thereafter, based on the projections of traffic, the gap in the availability of the capacity and likely requirement should be identified and alternative solutions to create requisite capacity in phased manner should be considered.

v  The following alternatives will be considered.

1.       By having improved speeds

2.       By having heavier/longer trains

3.       By having change of traction (from Diesel to Traction)

4.       Provision of Additional crossing stations

5.       Token less block working etc

v  After explore of above possibilities, still there is a gap in the availability of capacity and likely requirement cannot be abridged, the alternatives of "Path doubling in suitable phases" or "Introduction of CTC " should be considered.

v  The Line Capacity works will enable the Railway Administration to improve the operation as and when needed.

v  As transport facilities are to be created in a phased manner, the Line Capacity works were programmed annually and included in the "Works Programme".

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Differences between NPS and Old Pension System(NCSRPF)

Differences between NPS and Old pension system

NPS	Old Pension System (NCSRPF)
1. Full form is New Pension Scheme	1. Full form is Non Contributory State Railway Provident Fund
2. Employees who join on or after 01.01.2004 are covered under this scheme	2. Employees who join till 31.03.2004 are covered under this scheme.
3.  Defined Contribution Pension Scheme.  Here Contribution is defined i.e., 10% of Pay + DA.  Unlike Old pension system, here benefit i.e., pension is not defined.   It is based on investment returns along with accumulations until retirement age, annuity type and its levels..	3. Defined Benefit Pension Scheme.  Means Benefit (Pension) is fixed.  That is 50% of last pay is defined as Pension
4. Retirement Gratuity is not available.  But Death Gratuity is available.	4. Retirement Gratuity and Death Gratuity are available
5. Commutation of Pension is not available	5. Commutation up to 40 % is available.  Commuted portion shall be restored after the completion of 15 years.
6. Contribution to NPS is 10 % of Pay + DA	6. Contribution to NCSRPF is 8.33% of Pay only
7. Matching contribution from Employer	7. No matching contribution from Employer.
8. Managing the Funds:  Fund Managers approved by PFRDA - Provident Fund Regulatory Development Authority	8. Managing the Funds:  PF Trust appointed by Govt.
9. Regulator:  PFRDA	9.  No Regulator
10. Loan facility against PF amount is not available.	10. Loan facility against PF amount is available.
11.  At the time of Retirement:  Withdraw 40 % of total amount lying in Account (Employees contribution and Employers matching contribution incl: returns on investments). 60% Amount to be invest in Pension Annuity Schemes in order to get the monthly pension	11. At the time of Retirement, received the whole amount lying in employees PF Account with interest accrued there on.  Monthly pension @50% of last basic pay is provided by Employer
12. No provision of Family Pension.	12. Provision of Family Pension to the family members of deceased employee @ 30% last basic pay by Employer
13. Tax liability:  EET - Exempt, Exempt & Taxable.   Means Exempt on contributions made, Exempt on Accumulation and Taxed on Maturity.	13. Tax liability: EEE - Exempt, Exempt & Exempt.  Means Exempt of tax on Contribution, Accumulation and Maturity also.