Govt revises Interest Rate for Small Savings Schemes and PPF

The Finance Ministry (Budget Division) has issued an Office Memorandum O.M.No: 6-1/2011-NS.II (Pt) dated 26.03.2012 for revision of Interest Rates for various small saving schemes operated mainly through post offices and PPF.

Based on the recommendations of Shyamala Gopinath Committee for comprehensive review of National Small Savings Fund (NSSF), Government had earlier taken the decision that interest rates of various small savings shall be reviewed every financial year and revsions in the same to be notified before 1st of April of that year.

Accordingly the present revision in the interest rates of various small saving scheme has been made.  The following table provides the revision made:

Download Office Memorandum dated 26.03.2012:

Scheme Interest Rate w.e.f 1.12.2011 Interest Rate w.e.f 1.4.2012
Savings Deposit



1 year Time Deposit



2 year Time Deposit



3 year Time Deposit



5 year Time Deposit



5 year recurring deposit



5 year SCSS



5 year MIS



5 year NSC



10 year NSC







ECHS Facilities to Ex-Servicemen

The Government has sanctioned 426 Polyclinics for Ex- Servicemen Contributory Health Scheme (ECHS). 227 Polyclinics were sanctioned in the year 2002, all of which are functional. Due to increasing ESM population an additional 199 Polyclinics including 17 Mobile Clinics were sanctioned in October 2010, out of which 43 Polyclinics are operational, thus at present 270 Polyclinics are functioning. In addition the Government has sanctioned 15 new Regional Centers to strengthen the ECHS Services, out of which 6 Regional Centers are already functional. As on 1st March, 2012, there are 39,46,898 beneficiaries which include 12,34,069 ex-servicemen and 27,12,829 dependents.
The ECHS beneficiaries can avail treatment at state Government hospitals/Clinics. The cost of treatment at Government hospitals is reimbursed at the approved rates and 80% advance of the estimated cost of the treatment at Government hospitals/Clinics is admissible to the ECHS beneficiaries.
At present 1383 Private hospitals/Dental Clinics/Diagnostics Centers and Eye clinics throughout the country are empanelled with ECHS, where the ECHS beneficiaries can avail cashless treatment. In emergency cases, reimbursement is made at approved rates, even for treatment in non-empanelled hospitals.
This information was given by Minister of State for Defence Dr MM Pallam Raju in written reply to Shri Virender Kashyap and Shri Kuldeep Bishnoi in Lok Sabha on 26 Mar 2012.

From farm labourer to US company CEO

Jyothi Reddy went from being a farm labourer in Andhra Pradesh to owning a recruiting firm in the US with a turnover of $5 million. Kavitha Shanmugamtraces her incredible journey

NOTHING SUCCEEDS LIKE SUCCESS: Jyothi Reddy now and (below) then

Sometime in the 1980s, a young woman labourer was toiling in the fields under a harsh, southern sun for Rs 5 an hour. Seated on her haunches, she lifted her head towards the sky as an aeroplane flew past. She wanted to be on the flight…

In 2012, she is the president-founder of recruiting firm Keys Software Services, which boasts of a $5 million turnover. The company in Phoenix, Arizona, sponsors H1 visas and supplies manpower to companies.

 Her rags to riches story is the stuff of the great American dream. But Anil Jyothi Reddy’s journey from an orphanage to the top of the world has been an arduous one.

Crushed by poverty after her father lost his job as a teacher, her parents decided to keep their son at home and leave their two daughters in an orphanage. Jyothi’s sister ran back to her parents. But young Jyothi — then barely nine — carried on.

“When I lived with orphans I knew the pain of life,” Jyothi, 42, says in a telephonic conversation from the US. It was a hard life, sleeping on floors without blankets and eating meagre meals. “I wanted someone to hold me, share my feelings when I did well at school or felt sad. Those hard feelings stayed with me. I needed my mother when I was in pain. The worst part was I had to pretend she was dead.”

Jyothi’s story is one of determination — her unhappy childhood incessantly pushing her towards seeking a better life. “These girls (from the orphanage) are hungry for love and are filled with a desire for a better life,” says Vimla Radharami, a former matron at one of the four Bala Sadan orphanages run by the Andhra Pradesh government in Warangal.

Jyothi is now the owner of a million-dollar company, has customised homes in the US and India, owns a Toyota Camry (an earlier car was a BMW) and has “enough” jewellery.

“Her years at the orphanage taught her how to grasp reality. She always hunted for a way to make life better. The zone of discomfort is the zone of learning,” reasons Uday Kumar, a Visakhapattanam-based motivational speaker and co-author of No Condition Is Permanent, a book on Jyothi’s life.

Jyothi attended a government school while at the Bala Sadan orphanage. She also took a vocational course while residing in the orphanage superintendent’s house and helping out with their housework. It was here she realised the power of a good job for a woman. But the dream at that age seemed distant, especially after her parents married her off when she was 16 to her jobless cousin.

After the birth of her two children, she became an agricultural labourer, working at her father-in-law’s fields and in other fields. In Mailaram village, agricultural workers still remember her as friendly, keen to learn work, but often bemoaning her fate. “She used to walk around with an umbrella,” recalls one labourer with a laugh.

What came to her aid was a central government scheme, the Nehru Yuva Kendra (NYK), which sought to create awareness among the young. She became an NYK volunteer and later started teaching.

“Jyothi was hardworking and developed leadership qualities here,” says Mandala Parashu Ramulu, a former NYK colleague who now runs a non-government organisation. “We would encourage villagers to pool in money to build a bus shelter, for example,” he adds.

She worked during the day and stitched petticoats at night to earn more. She learnt typing and studied for a postgraduate degree from the Dr B.R. Ambedkar Open University on weekends, after obtaining a BA from Kakatiya Open University at Warangal. In 1992, she bagged a special teacher’s job, earning Rs 398 a month.

She had to travel two hours to reach her school, but Jyothi made the most of it by selling saris. “I convinced my sister’s landlord to give me 10 saris and I got a profit of Rs 10 from each sari I sold,” she says. “There were women on that train gossiping or reading books but I did not waste time. I had to support my children and I needed money.”

Her job as a teacher was regularised and she was appointed a “girl development officer”. Her salary shot up to Rs 18,000 — but Jyothi wanted more for her daughters and herself.

The visit of a relative from the US prompted her to try her luck in the West. She studied computers, got an American visa, took long leave from her government job, placed her two daughters in a Christian missionary hostel — and left for the US in 2000. The daughters joined her later and are now married. Her husband lives in Hyderabad and occasionally visits them.

Jyothi started by working in gas stations and cleaning bathrooms in motels. She babysat and loaded and unloaded goods, and finally landed herself a job in a New Jersey cassette shop on a $420 salary.

One day an Indian visiting the shop offered her a job in his brother’s recruiting firm in South Carolina for $1,000 a month with free accommodation. Jyothi moved on.

“It was a crucial time for me. I had to deal with Americans but did not know English very well,” she recounts.

Jyothi often turned to the Bible for help. “I picked up key sentences from the Bible and repeated them. I’m a crazy learner, I love learning new things. I believe God will save you if you work hard,” she says simply. “That is the positive point about America. They don’t look down on you; I love working in America.”

She excelled in her work, picking up the trade. But a few ensuing hurdles — a company offered her a job and then backtracked, forcing her to go back to babysitting and gas station work — prompted her to start her own business.

The idea hit her when she went to Mexico to get her visa stamped: “I knew the ins and outs of the paperwork involved in getting the HI visa stamped.” With her savings of $40,000, she opened an office in Phoenix in 2001. “My first placement was a Gujarati boy — I fixed him in an IT firm. And I was on a roll,” she says happily.

The only dissenting note comes from her surviving parent — her mother. Recovering from a lung infection in a Warangal hospital, Swaraspathi Reddy is unwilling to accept her daughter’s tale of battling overwhelming odds. “We also helped her but she does not admit that,” she maintains.

Defensive about abandoning her, she says: “Our condition was very bad then. I too suffered, leaving my daughter behind and would cry for her. But I never let my sons work or suffer even for a day.”

And therein hangs the tale.

An inspirational, but a true story from a farmer woman, who grew on to become an entrepreneur in US.


Income tax Exemption limit proposed to be raised to Rs. 3 lakh

The Standing Committee on Finance on the DTC bill, headed by former finance minister Yashwant Sinha, has recommended raising the income tax exemption limit to Rs.3 lakh a year and the investment limit for tax saving schemes to Rs.3.20 lakh.

With regard to investment limit for tax saving is concerned, the committee has recommended that the proposal in the DTC for long term investments such as pension/provident funds may be raised to Rs.1.5 lakh from Rs. 1 lakh. The deduction in respect of premium on life insurance, tuition fees paid for children education, etc which are coming under a separate Rs.50,000 limit as per DTC bill has been proposed to be fixed with the maximum limit of Rs.1 lakh.

In addition to these deductions, the committee has also proposed a new deduction limit of Rs.50,000 for Higher eduction expenses. So the total deduction/savings limit, apart from interest deduction on home loan has been proposed to be fixed at Rs.3.2 lakh.

The Committee has also proposed that a 10 percent tax be levied on income between Rs.3-10 lakh, 20 percent between Rs.10-20 lakh and 30 percent on income over Rs.20 lakh.

The committee which was appointed to study the the Direct Tax Code proposals, submitted these recommendations to Lok Sabha Speaker Smt Meira Kumar last week.

The Direct Tax Code bill, if passed by Parliament this year, will replace the existing Income Tax Act.

As per the news reported in leading news papers, before enactment of Direct Tax code Government may change the Income Tax structure in the lines of these recommendations in this year Budget itself , which is to be submitted by Finance Minister on 16th March 2012.

Source: The Economic Times

Revision of PPOs of pre-2006 family pensioners

Revision of PPOs of pre-2006 family pensioners.

Shri C.V. Subramaniam-retired Director in the Deptt of IT, GOI

My Career – an Autobiographical Account

    My Career – an Autobiographical Account.

    “This article is a part of the book “74 Not Out and some cheeky singles” written by Shri C.V. Subramaniam. He retired as Director in the Department of Information Technology, GOI and has held several important positions in the Government including the Science Advisory Council to Prime Minister. He has published 70 plus articles in various leading news papers and has published a book on Human Resource Management.”

Modified Parity as per 6cpc improved Pension benefits – Says Minister

Modified Parity as per 6cpc improved Pension benefits – Says Minister.


Authorization of Pvt Ltd Banks for Disbursement of Pension to Defence Pensioner
In pursuance of Reserve Bank of India’s decision on the subject, the following private Sector Banks have been authorised for disbursement of disbursement of pension to Defence pensioners:-

(a) HDFC Bank Ltd
(b) UTI Bank Ltd
(c) IDBI Bank Ltd
(d) ICICI Bank Ltd
Exemption of Income Tax on iberalised Family Pension
A case was initiated by PS Dte for exemption of income tax on Liberalised Family Pension in the year 2002. After concerned efforts a Gazette Notification has been issued wef 09 Feb 2005 for exemption of Liberalised Family Pension from the income for purposes of exemption of income tax if death of the member of armed forces (including Para Military Forces) has occurred under following circumstances in the course of the military operation and duties.

(a) Acts if violence or kidnapping or attacks by terrorists or anti-social elements
(b) Action against extremists or anti-social elements
(c) Enemy action in international war
(d) Action during deployment with a peace keeping mission abroad
(e) Border skirmishes
(f) Laying or clearance of mines including enemy mines as also mine sweepingoperation
(g) Explosions of mines while laying operationally oriented mine-fields or lifting ornegotiation of mine-field laid by the enemy or own forces in operational areas nearinternational borders or the line of control
(h) In the aid of civil power in dealing with natural calamities and rescue operations
(j) In the aid of civil power in quelling agitation or riots or revolts by demonstrators
NRI Pension- Not to be Stopped on Change of Nationality
A large number of representations were being received from Ex-servicemen Association/ NRIs regarding stoppage of pension of Ex-Servicemen on their acquiring foreign nationality. However, in case of civil pensioners change in citizenship by any NRI pensioners did not affect their entitlement. A case was taken up with the office of PCDA(P), Allahabad and office of CGDA, New Delhi in 2003 for bringing the Armed Forces pensioner at par with civilian pensioners. Govt letter has been issued providing that even in the case of Armed Forces Pensioners the entitlement of pension will remain unaffected on the change of nationality and pension will continue to be paid by his/her pension disbursing agency. However, the pensioner should intimate the change of nationality as per the provision to the Pension Disbursing Agency as well as to the PCDA (Pension), Allahabad for updation of their records.

Two Family Pensions
The re-employed Army Personnel have been made eligible for two family pensions i.e. one from army and the other from civil side if re-employed in organizations covered under Employees Pension Scheme 1995 and Family Pension Scheme 1971.

Grant of Liberalised Family Pension to Widows Who Remarried Before 01 Jan 1996
The widows who remarried after 01 Jan 1996 were allowed to retain their Liberalised family Pension/Special Family Pension while widows who remarried before 01 Jan 1996 were left out. This has been creating great injustice to pre 1996 widows. A case was taken with MoD for extending these benefits to pre 1996 cases also. MoD has issued orders vide their letter No 1(1)/2001/D(Pen-C) dated 24 Jun 2005 granting Liberalised Family Pension benefits to pre-1996 cases wef 24 Jun 2005. This will greatly benefit the widows who remarried before 01 Jan 1996.

Exemption of TDS From Pension
Income Tax was hitherto deducted at source from family pensioners by the Pensions Disbursing Agency. Min of Fin (CBDT) has now clarified that family pension does not fall under the category of salary, therefore, no tax is liable to be deducted at source.

Ex-Gratia Award Disability Cadets (Direct)
Rates of Ex-Gratia disability award to disabled cadets have been revised from Rs 600/-p.m. to Rs 2100/-p.m. wef 01 Aug 97 issued vide Govt of India, Min of Def letter No 1(6)/99/D(Pen-C) dated 15 Sep 2003.

Pensionary Benefits to Nk And Hav Granted Assured Career Progression (ACP)
Govt letter has been issued vide No. B/39022/AG/PS-5(Policy)/29/A/D(Pen/Sers)/06 dated 10 Jan 2006 stating that pension in respect of JCOs/OR granted Assured Career Progression (ACP) upgradation, will be calculated based on the maximum of the pay scale granted under ACP upgradation including 50% of the highest classification allowance, if any, of the rank held and group in which paid subject to the condition that the upgraded pay scale should be held continuously for 10 months preceding their discharge from service.
Grant of Family Pension For Life to Handicapped Children of Armed Forces Personnel
Govt letter No. PC MF-Air HQ/24229/283/-FPHC/PP&R-3(i)/582/A/D(Pen/Sers) dated 29 Nov 2005 issued has made the following provisions :-

(a) Medical officer of rank of Brig/above shall be competent to render the certificate required
(b) Gaurdian shall be nominated by the pensioner instead of a court of Law. In case no such nominationhas been made by pensioner in his life time the nomination shall be made by spouse of the deceasedpersonnel
(c) The name of handicapped child shall be indicated in the PPO to be issued for grant of Service Pension/Family Pension.

Merger of Dearness Relief on Disability Pension
Orders were issued vide Govt of India letter No. 42/2/2004-P&PW(G) dated 15 Mar 2004 for merger of Dearness Relief equal to 50% of basic pension/family pension wef 01 Apr 2004. According to these orders Dearness relief equal to 50% was to be merged with basic pension and remaining of DR was to be calculated on (Basic pay + 50 merged DR). However no specific instruction were issued for merger of DR on disability element on pension. A case was taken up by PS Dte with the Govt who have now issued orders vide 1(62)/2004/D(Pen-C) dated 02 Dec 2005 for merger of 50% DA/DR on disability pension to Armed Forces personnel/pensioners wef 01 Apr 2004. The merger of 50% DR with basic pay shall apply to both disability element and service element simultaneously.

Modified Parity and Increase in Weightage JCOs/OR
On implementation of V CPC recommendations modified parity at the min of pay scales was granted to officers/JCOs/OR FOR Pre 1996 retirees. Since the modified parity at minimum scale was not beneficial for JCOs/OR, case was taken up PS Dte with the Govt to grant modified parity at maximum of pay scale for JCOs/OR. Govt has now granted modified parity to pre-1996 retirees JCOs/OR at max of pay scale in which they have retired subject to have served for minimum 10 months in that rank.
Case was also taken by the PS Dte with the Govt to increase the weightage being given to JCOs/OR as the JCOs/OR were only given 05 years weightage irrespective of rank held. Due to this anomaly no JCOs/OR could meet the requirement of 33 years of qualifying service to get full entitlement of pension for past as well as future JCOs/OR retirees will be as under subject to maximum qualifying service of 30 years details of which have been tabulated earlier.
The above benefit would be applicable to Service Pension including Invalid Pension, Service element of disability pension and War Injury pension. The orders are effective from 01 Jan 2006 and no arrears are to be given. The above orders have been issued vide Govt of India, Min of Def letter No 14(3)/2004-D (Pen-Sers)/Vol III dated 01 Feb 2006.

Implementation of the Govt Orders Regarding Abolition of the Institution of Military Adviser (Pension)
Release Medical board before retirement /discharge is held in case of any disability at the time of such retirement /discharge. An individual found unfit for continuation in service on medical ground is brought before an invaliding Medical Board prior to invalidment. Disability pension claims of LMC personnel of the Armed Forces are decided on the basis of findings of Invaliding Medical Board/Release Medical Board. The Medical advisors (Pension) from the office of DG AFMS attached to PCDA(P), Allahabad in respect of JCOs/OR and DDG AFMS(Pen)/JD AFMS(Pen) in respect of officers, were empowered to alter the recommendations of Medical Boards. In a number of cases the recommendation of Medical Boards were being altered to the disadvantage of the individuals concerned. Consequently, the aggrieved personnel were taking recourse to appeals and litigation for redressal.
Based on the judgments of the Supreme Court of India and cases up with the MoD by the DGAFMS, a Govt letter dated 01 Sep 05, abolishing the institution of MA(P) was issued. However, certain provisions in the Govt letter came in the way of implementation of the orders.
Most of the amendments suggested by PS Dte have been incorporated by the Min of Def in the corrigendum No 1(2)/2002/D(Pen-c) dated 31 May 2006. Detailed letter to the environment incorporating the provision of the Govt letters / Corrigendum and laying down the procedure for adjudication of claims for disability pension/ special family pension has been issued by the Dte vide letter No B/40122/MA(P)/AG/PS-5 dated 20 Jul 06.

Eligibility of Unmarried Daughters of Armed Forces Personnel for Grant of Family Pension beyond 25 years of age
The Ministry of Defence vide their letter No. 1(3)2007/-D(Pen/Policy) dated 25 Oct 2007 have issued instructions regarding grant of family pension to unmarried daughters beyond the age of 25 years at par with widowed/divorced daughters subject to their income from all sources not exceeding Rs. 2550/-pm.

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