Govt abolishes sumptuary allowance for training institute chiefs; entertainment allowance to cabinet secretary also done away with

IN LINE with the 7th Central Pay Commission recommendations, the government on Tuesday issued an order abolishing sumptuary allowance in all the training establishments, academies and institutes with effect from July 1, 2017. This allowance is out of the purview of the income tax and given to directors, course directors and councillors in national and central training establishments mainly to entertain small groups of students and faculty. The order however did not mention about entertainment allowance (Rs 10,000 per month) given to the cabinet secretary (to entertain distinguished visitors), entertainment allowance in Indian Railways, official hospitality grant in defence forces and…

sumptuary allowance to judicial officers in Supreme Court Registry — all of which also came under the sumptuary allowance bracket. But it's learnt that the government accepted the 7th CPC's recommendation of abolition of the entertainment allowance to the cabinet secretary and to the Indian Railways officers.
This is what the July 25 DoPT office memorandum said: “Consequent upon the acceptance of the recommendations of Seventh Central Pay Commission by the Government conveyed vide Ministry of Finance, Department of Expenditure Resolution No. 11-1I2016-IC dated July 6, 2017, the President, in supersession of all existing orders issued on the subject from time to time, is pleased to decide that Sumptuary Allowance in all the Training Establishments/Academies/Institutes stands abolished. 2. These orders shall be effective from 1st July, 2017. 3. In so far as the employees working in the Indian Audit and Accounts Department are concerned, these orders are issued with the concurrence of the Comptroller and Auditor General.”

Till last month, ₹3500 per month was given to a director or head of a training institute, ₹2500 pm for a course director and ₹2000 per month for a counsellor. 

In fact, sumptuary allowances are granted to various grades of personnel in the Central Government mainly to compensate for the expenditure incurred on entertaining visitors.

In case of the cabinet secretary, the entertainment allowance per month is Rs 10,000. So far as the armed forces officers are concerned, the allowance is called official hospitality grant, and it varies from one rank to the other. For example, a service chief of vice-chief is entitled Rs 3,000 per month, a brigadier-ranked officer gets the half — Rs 1,500 per month. 

Ahead of the finalization of the 7th Central Pay Commission, there was a demand from various service associations to raise the amount of the allowances. But the Commission after analyzing the matter, said, “the structure of these allowances is quite haphazard, and the rates vary widely”. “Moreover, they are paid only in certain ministries, not across the board.”

The Pay Commission then gave its recommendation: “With the rise in pay scales offered by successive Pay Commissions, including the present one, we are of the view that these allowances have lost their relevance. Accordingly, it is recommended that all these allowances should be abolished. Such expenditure on hospitality should be treated as office expenditure and the ministry of finance should lay down the ceilings for various levels.”

So, the 7th Central Pay Commission recommended the abolition of all such sumptuary/entertainment allowance at one go.