Reference an article appeared in a section of press, it is clarified that the Federal Cabinet has approved grant of “Disparity Reduction Allowance” @ 25% of the basic pay of BPS-2017 w.e.f. 1st March 2021, for those civil employees in BPS 1 to BPS 19 of the Federal Government who have never been allowed additional salary equal to or more than 100% of the basic pay or performance allowance.
There are a number of institutions / organizations of Federal Government that have been previously granted additional allowances as 100% or more of the basic pay or performance allowance. The disparity reduction allowance aims at reducing the gap in the salaries of those already granted additional salary and those who have never been granted additional salary. The number of such employees who have never been granted additional salary is approximately 296,470 out of a total of 623,215 civilian employees.
This allowance has been granted as an interim arrangement till finalization of recommendations of Pay & Pension Commission. The Pay & Pension Commission has been asked to give its recommendations for revising the salaries of all federal government employees (civilian and Armed Forces), before the next budget so that salaries could be revised across the board for all Federal Government employees. The Commission has also been tasked to review the existing pension system of the Federal Government and give recommendations.