Advances as per Sixth Central Pay Commission ReportA.
Interest Free AdvancesThe Commission recommended that the existing amount of following interest free advances should be doubled:-
- Festival Advance
- Advance in the event of natural calamity like flood, drought, cyclone, etc.
- Advance for training in Hindi through Correspondence Course.
The rates of these allowances shall be increased by 25% every time dearness allowance on revised pay bands increases by 50%. All other existing conditions in respect of various interest free advances shall be maintained without any change.
B. Interest Bearing Advances· no interest should be charged on advances for purchase of warm clothing and bicycle. Like in the case of other interest free advances, the existing rates of advances for purchase of warm clothing and bicycle should also be doubled.
· The Commission was of the view that in order to spread the benefit in a more equitable manner, it was desirable to provide only for the element of interest subsidy and make available various interest bearing advances to Government employees through arrangements with public sector banks.
· The Government will give an interest subsidy equal to 2 percentage points in rate of interest being charged by the bank to the employee.
· The interest subsidy for employees with disabilities will be equal to four percentage points in the rate of interest being charged by the bank.
· Simultaneously, the existing limit of various interest bearing advances should also be doubled for the purpose of getting the subsidy. This limit should automatically be increased by 25% every time the dearness allowance payable on revised pay bands goes up by 50%.
· The eligibility for taking the advances should also be removed because the repaying capacity would, in any case, be considered by the concerned bank at the time of processing the loan application.