Lok Sabha has passed a bill that seeks to allow organized sector employees to get tax free gratuity up to Rs 20 lakh at par with central government employees and fix maternity benefit for women workers through executive order. The Payment of Gratuity (Amendment) Bill had become necessary after the 7th pay commission had increased tax free gratuity from Rs 10 lakh to Rs 20 lakh. The Payment of Gratuity (Amendment) Bill had become necessary after the seventh pay commission had increased tax free gratuity from Rs 10 lakh to Rs 20 lakh.
The bill, which was passed on 15-03-2018, will now be taken up in the Rajya Sabha and is unlikely to be opposed by the opposition political parties. The move is pro-worker and once passed will benefit millions of organised sector workers in the country. The move comes at a time when anti-government protests from farmers, traders and organized sector employees are seen with regularity across India.
The union cabinet had approved the bill in September, 2017 and had then said that the bill “increase the maximum limit of gratuity of employees in the private sector, and in public sector undertakings/autonomous organizations under government who are not covered under the Central Civil Services (Pension) Rules”. The Payment of Gratuity Act, 1972, ensures gratuity payment to employees engaged in factories, mines, oilfields, railway companies, plantations, ports, shops or other establishments.
The bill, once passed by Parliament, will also allow the union government to fix maternity benefit and gratuity payment in future without amending the bill again and again. Meaning, if at any point the government seeks to enhance these benefits in accordance with the benefits enjoyed by the central government employees, it can do so though executive orders without going to Parliament.