Government Issues Directive on Entertainment Allowance in New Pay Scale, Orders Pension Recalculation

The government has issued a corrigendum to the Pay and Allowance Order of the new National Pay Scale 2026, incorporating new provisions regarding post-retirement leave, net pension and gratuity determination, and the recalculation of previously settled pension claims. The Finance Ministry issued the notification on Wednesday, November 11, 2026.

Key Provisions of the Amended Order

According to the notification, a new sub-clause (ja-ja) has been inserted after sub-clause (ja) of clause (3) of Article 1 of the original order. The new provision states that if any employee's net pension and gratuity claims were settled between July 1, 2026, and the date of issuance of the amended order, based on the basic salary accrued under the National Pay Scale 2015 after the completion of post-retirement leave, such claims must be recalculated where applicable, subject to the provisions of sub-clause (jha).

Provision for Additional Payment

The amended order further stipulates that if any employee becomes entitled to additional money as a result of the recalculation, it must be paid. This directive primarily applies to government employees who proceeded on post-retirement leave after the new pay scale took effect and whose pension-related claims have already been settled.

Entertainment Allowance Context

The government's directive regarding entertainment allowance under the new pay scale is considered particularly significant by analysts. Although the notification does not make separate mention of entertainment allowance, the recalculation of pension and gratuity is expected to indirectly impact this allowance. The amended order will also apply to previously settled pension claims, potentially providing new benefits to numerous retired employees.

Impact of the Notification

As a result of this amendment, employees who have already retired or are currently on post-retirement leave will have their pensions and gratuity recalculated according to the new pay scale. They may consequently receive additional financial benefits. Concerned departments have been instructed to take necessary measures to implement this directive.