Government of India

Ministry of Personnel, Public Grievances & Pensions

Department of Personnel & Training



New Delhi, the 28th February, 2002




Sub: Special Voluntary Retirement Scheme for Surplus Central Government Employees.



        The Expenditure Reforms Commission (ERC) set up by the Government of India has suggested a liberal Voluntary Retirement Scheme (VRS) for the employees declared surplus.  This recommendation, contained in Commission’s second Report on ‘ Optimising Government’s Staff Strength – Some General Issues’ has been considered carefully  and the Central Government have decided to introduce a special  Voluntary Retirement Scheme (VRS) as per details given in para 2 hereinunder for the permanent employees declared surplus in any Ministry/Department as a consequence of one or more of the following:-


(i)              Implementation of decisions of the Cabinet regarding restructuring of Ministries/Departments;

(ii)           Implementation of the recommendations of the Expenditure Reforms Commission;

(iii)           Implementation of the decision of a Ministry/Department relating to downsizing/rightsizing including, inter alia, restructuring of an organization, transfer of an activity to a State Government, Public Sector

Undertaking or other Autonomous Organisation, discontinuation of an ongoing activity and introduction of changes in technology; or

(iv) Implementation of work study reports undertaken by the Staff Inspection Unit of the Ministry of Finance or any other body set up by the Central Government or the Ministry/Department concerned.


2.   The features of the Special VRS  for the employees  declared surplus are as under:-


(a)           All permanent employees rendered surplus  irrespective of their   age and  qualifying service can opt for the scheme.

(b)           An optee of Special VRS will be entitled to receive an ex-gratia amount equal to basic pay plus dearness allowance for the number of days worked out on the basis of  length of service @ 35 days for each completed year and 25 days for each remaining year. For any part of a year, the number of days, for ex-gratia amount, will be worked out on the basis of 365 days in a year. The ex-gratia amount will be further subject to the following conditions:

(i) total number of years to be counted for payment of ex-gratia will not exceed 33 years;

(ii)  No weightage of additional service will be given for the purpose of calculation of ex-gratia;

(iii) The ex-gratia will  be subject to a minimum of Rs.25,000/- or 250 days emoluments, whichever is higher;

(iv)The ex-gratia amount should not exceed the sum of the basic pay plus DA that the employee would draw at the prevailing level for the balance of the period of service left  before superannuation;

(v) The ex-gratia amount will be paid in lump-sum;

(vi) The ex-gratia amount up to Rs.5.00 lakhs will be exempted from Income Tax;

(c)            A weightage of five years to the qualifying service shall be given under CCS(Pension) Rules, 1972 to such permanent surplus employees who have rendered a minimum of 15 years of qualifying service on the date  they are declared surplus. However, as provided in rule 29 of CCS (Pension) Rules, 1972, the qualifying length of service after taking into account the aforesaid weightage should not be more than the service he would have rendered had he retired on the date of his superannuation .

(d)           Encashment of Earned Leave accumulated on the date of relief   as per CCS(Leave)Rules, 1972;

(e)           Payment of savings element with interest in the Central Government Employees Group Insurance Scheme   as per rules;

(f)             TA/DA as on retirement for self and family for settling anywhere in India   as per Travelling Allowance Rules;

(g)   Group ‘A’ officials opting for the  special VRS will    be   exempted from the operation of rule 10 of the CCS (Pension) Rules which stipulates previous sanction of the Government for accepting commercial employment.


3.     Payment of ex-gratia to the employees declared surplus and opting for the special VRS within the specified three months period  will be over and above the normal retirement entitlements under CCS (Pension) Rules, 1972. 


4.     The order of voluntary retirement in each case should clearly stipulate that the surplus post held by the retiring incumbent will stand abolished from the date of his/her voluntary retirement.


5.     The identification of surplus employees  for the purpose of VRS would be guided by procedure given in Item 3 of Annexure-I under the heading “Steps for identification of Surplus staff” to the revised scheme of the disposal of personnel rendered surplus due to reduction  of establishment in Central Government Department/Offices notified vide Circular No. 1/18/88-CS-III of DoPT dated 1st April, 1989.


6.     The   permanent employees declared surplus will have to exercise option for special VRS within three months from the date he or she has been declared surplus in any Ministry/Department. Surplus employees presently on the Rolls of the Surplus Cell (Redesignated as the Division of Retraining and Redeployment) of the Department of Personnel & Training as on the date of this OM can also opt for special VRS within three months from this date.


7.     In order to facilitate the maintenance of a close watch on the implementation of the scheme, all Ministries/Departments are required to submit quarterly returns to the Surplus Cell of Department    of Personnel & Training that may be prescribed  by that Cell.


8.     Ministry of Finance, etc. are requested to give wide publicity to the contents of this O.M. to the employees declared surplus.




(Smt. Pratibha Mohan)

Director (E-II)

Tel.: 301 3180




        All Ministries/Departments (As per standard list).