Cabinet clears Bill to double gratuity cap

Indo-asian news service

New Delhi, Sept 12: The Union Cabinet Tuesday approved a bill for introduction in Parliament that is aimed at doubling the maximum gratuity limit to Rs20 lakh for certain categories of employees, at par with central government staff.

The Payment of Gratuity (Amendment) Bill, 2017, aims to increase the maximum gratuity limit for employees in the private sector and in Public Sector Undertakings/autonomous organisations under the government not covered under Central Civil Services (Pension) Rules, at par with central government employees, an official statement said.

The Payment of Gratuity Act, 1972, applies to establishments employing 10 or more persons. The present ceiling on gratuity under the Act is Rs10 lakh.

With the implementation of the 7th Pay Commission, in case of government servants, the ceiling was raised to Rs 20 lakh.

“Considering inflation and wage increase even in case of employees engaged in private sector, the government is of the view that 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 the Act of 1972,” the statement added.

Separate company

In another decision, the Cabinet approved hiving off the mobile tower assets of Bharat Sanchar Nigam Limited (BSNL) into a separate company, fully owned by BSNL.

“We will complete the hiving off process in two years. Out of total telecom towers in the country, around 15 per cent is with BSNL,” Communications Minister Manoj Sinha said while briefing the media on this Cabinet decision.

He also said the tenancy ratio of BSNL will improve with this hiving off decision.

There are around 4,42,000 mobile towers in the country out of which more than 66,000 mobile towers are of BSNL.

“This approval authorizes BSNL to monetise its telecom tower infrastructure with the formation of a separate subsidiary company,” an official statement said here.

“An independent, dedicated tower company of BSNL with a focused approach will lead to increasing of external tenancies and consequentially higher revenue for the new company,” the statement added.

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