Family Planning Allowance

The Family Planning Allowance was a monthly incentive allowance paid to a central government employee who adopted the small-family norm by undergoing sterilization after limiting the family to one or two children. It belonged to an earlier era of population policy, when the Government used a set of service incentives to encourage its own employees to set an example on family size. It was abolished with effect from 1 July 2017 on the recommendation of the 7th Central Pay Commission, and it is no longer paid to anyone; this article is a record of what it was rather than a guide to a live entitlement.

The allowance is one of the clearest examples of a particular kind of decision the 7th CPC made. Across its review it found a great many small allowances, and it sorted them into those that answered a continuing need and should be kept, those that overlapped and should be merged, and those whose purpose had been served or overtaken and could be dropped. The Family Planning Allowance fell in the last group: the Commission judged that the small-family norm no longer needed a cash incentive, and the Government agreed.

This article explains what the allowance was, the policy it served, who qualified for it, the rate it carried under the 6th Central Pay Commission, the 7th CPC decision to abolish it and the reasoning behind it, what abolition meant in practice, and the tax position while it was payable. It is a child of the allowances hub and sits alongside the abolished allowances of the 7th CPC .

What it was, and the policy it served

The Family Planning Allowance was a product of the population policy of the 1970s and 1980s, when limiting family size was a central plank of government policy and the state looked to its own employees to lead by example. The device was simple: a government servant who underwent sterilization after having a small family would draw a modest recurring allowance for the rest of their service. It was an incentive, not a reimbursement of any cost, and its object was behavioural, to make the small-family norm attractive and visible within the government workforce.

That places the allowance in a different category from most of the others in the pay structure. The conveyance allowance meets a cost, the risk and hardship allowance compensates a condition of service, the dress allowance reimburses a uniform. The Family Planning Allowance did none of these; it paid the employee for having made a personal choice the state wished to encourage. That is precisely why it became a candidate for abolition once the policy climate changed: an incentive is only worth paying while the behaviour it promotes still needs promoting.

Who qualified

Eligibility rested on the employee having adopted the small-family norm through sterilization. In broad terms, a central government employee, or one whose spouse underwent the procedure, qualified where the family was limited to a small number of living children, one or two under the norm as it stood, and the sterilization was carried out within the prescribed conditions of age and documentation. Once qualified, the employee drew the allowance every month from the month following the procedure until retirement, for as long as they remained in service.

The exact conditions, the number of children, the age limits and the certification required, were set by the relevant orders and were tightened over time as the norm itself moved. The essential point is that the qualification was a one-time event, the sterilization, after which the allowance ran continuously, rather than a condition that had to be re-established month by month. That continuous character is part of why abolition was a clean step: there was no recurring cost or duty to wind down, only a recurring incentive payment to stop.

The rate under the 6th CPC

The allowance began, in its earliest form, as an amount equal to one increment of the employee’s pay, a natural way to size an incentive against the pay structure of the day. Under the 6th Central Pay Commission it was recast as a fixed monthly slab linked to grade pay, so that the amount rose in steps with the employee’s grade pay rather than tracking a live increment. The slabs ranged from a modest figure of the order of Rs. 210 a month at the lower grade-pay levels up to about Rs. 1,000 a month at the higher ones.

Because the allowance was abolished from 1 July 2017, these are historical figures with no current force, and the precise slab amounts should be read from the 6th CPC orders rather than treated as live rates. What matters for the present is that the allowance was always a small monthly sum, an incentive marker rather than a significant part of pay, which is one reason its abolition drew little controversy.

The 7th CPC decision to abolish

The 7th Central Pay Commission examined the Family Planning Allowance in its general review of allowances and recommended that it be abolished. Its reasoning was that the small-family norm has, over the decades, become widely accepted across society, so that a special monetary incentive for government employees to adopt it no longer serves a real purpose. What had once been a policy lever had, in the Commission’s view, done its work.

The Government accepted the recommendation, and the allowance was abolished with effect from 1 July 2017 through the Department of Expenditure resolution on the 7th CPC allowances. This sits within the same exercise that abolished a number of other allowances the Commission judged to have outlived their purpose, and it should be read against the two other fates in that exercise: some allowances, such as the washing allowance, were not abolished but subsumed into a larger consolidated allowance, and others, such as the cycle (maintenance) allowance , were retained because the underlying need persisted. The Family Planning Allowance was neither merged nor retained; it was ended.

What abolition meant in practice

Abolition took effect from 1 July 2017 and operated going forward. From that date no fresh grant of the allowance was made, and it ceased to be a live component of pay. Because the qualification was a past event and the payment a simple recurring sum, there was nothing to transition into another allowance; the line simply stopped.

The treatment of those who were drawing the allowance as on 30 June 2017 is governed by the Department of Expenditure order and any clarifications issued under it, and in practice the allowance is treated as abolished rather than carried forward. An employee looking for it on a current pay slip will not find it, and a new employee cannot qualify for it, because the scheme no longer exists. Where an older document or a legacy calculator still refers to a Family Planning Allowance, it is describing the position before 1 July 2017.

It is also worth noting what the allowance was not, even while it was payable. It was a standalone incentive and not part of basic pay , so it was not reckoned for the calculation of dearness allowance , house rent allowance or the pension, all of which are computed on basic pay rather than on the sum of pay and every allowance. Its abolition therefore did not disturb those calculations; it removed a small standalone credit and left the core pay elements untouched. That limited footprint is a further reason the abolition was administratively clean.

Where it sits among the abolished allowances

The Family Planning Allowance is a useful illustration of the 7th CPC’s approach to the incentive and special allowances it decided not to keep. It is best read alongside the other outcomes of that review. The overtime allowance was largely abolished for civilian staff because attendance and working hours were being managed in other ways, though it survived for certain operational and statutory-industrial categories. The washing and other uniform allowances were subsumed into the consolidated dress allowance . The cash-handling and treasury allowances were retained in a merged form. Against all of these, the Family Planning Allowance stands out as a straightforward abolition of an incentive whose social purpose the Commission judged to have been achieved.

For a fuller list of what the 7th CPC ended, see the abolished allowances of the 7th CPC article. The common thread is not that these allowances were unpopular but that the Commission tested each against a continuing purpose, and the Family Planning Allowance failed that test not because it had been misused but because the goal it served had, in the Commission’s assessment, been reached.

The tax position while it was payable

While it was payable, the Family Planning Allowance was taxable as part of salary income in the ordinary way. It was an incentive allowance and did not fall within the Section 10(14) exemptions under Rule 2BB of the Income-tax Rules, which are confined to defined categories of field, travel and duty allowances. There was no special exemption for it, so it was counted in gross salary and taxed like the rest of pay under whichever regime applied.

Since the allowance has been abolished, the tax question is now academic, and it has no bearing on a current salary computation. For how allowances generally feed into the tax computation, see income tax for government employees and the old versus new tax regime article.

The 8th CPC outlook

The Family Planning Allowance has been abolished since 1 July 2017, and there is no live rate or scheme to revise. Whether the 8th Central Pay Commission revisits any incentive allowance of this kind is not known, but a return of the Family Planning Allowance in particular would be unusual, because the policy rationale that created it has moved on rather than merely faded. No figure for the allowance can be stated as current, and none should be, since it does not exist in the present pay structure. The settled position is that it is a historical allowance, ended by the 7th CPC and not replaced.

Related Articles

• Allowances for central government employees
• Abolished allowances of the 7th CPC
• Overtime allowance
• Cycle (Maintenance) Allowance
• Washing allowance
• Dress allowance
• Cash Handling and Treasury Allowance
• Conveyance allowance
• Risk and hardship allowance
• Annual increment
• Grade pay
• Personal pay
• Dearness allowance
• 6th Central Pay Commission
• 7th Central Pay Commission
• 8th Central Pay Commission
• Income tax for government employees
• Old versus new tax regime
• Take-home salary for central government employees
• Department of Expenditure
• Central government employees in India
• Basic pay
• Pay matrix
• Salary by pay level
• 7th CPC salary calculator

External references

• Department of Expenditure
• Department of Expenditure: 7th CPC allowance orders
• Ministry of Health and Family Welfare

References

1. Report of the Seventh Central Pay Commission (November 2015), Chapter 8 (Allowances): recommendation to abolish the Family Planning Allowance on the ground that the small-family norm is now widely accepted.
2. Ministry of Finance, Department of Expenditure, Resolution No. 11-1/2016-IC dated 6 July 2017: Government decision on the 7th CPC allowances, abolishing the Family Planning Allowance with effect from 1 July 2017.
3. 6th Central Pay Commission orders on the Family Planning Allowance (grade-pay-linked monthly slabs), and the earlier orders under which it was granted as an amount equal to one increment.
4. Department of Personnel and Training and Ministry of Health and Family Welfare instructions on the small-family norm and the conditions of the Family Planning Allowance (sterilization, number of living children, certification).
5. Income-tax Act 1961, Section 10(14) read with Rule 2BB of the Income-tax Rules, on the taxability of allowances outside the notified exemptions.