Saturday, June 18, 2016

Empowered Committee recommendations on 7th Pay Commission report – Detailed report by Mr.Dorai

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Empowered Committee recommendations on 7th Pay Commission report – Detailed report by Mr.Dorai

MEDIA REPORT THAT EMPOWERED COMMITTEE OF SECRETARIES ARE PLANNING TO RECOMMEND 30 PERCENT INCREASE IN BASIC PAY SHALL ACTUALLY RESULT IN LOWER BENEFIT THAN WHAT THE 7TH CPC RECOMMENDED – M.DORAI

Recent news appearing in the media that the Empowered Committee of Secretaries are planning to recommend 30 percent increase in the Basic Pay of Central Government employees has come as a bolt from the blue as it shall fetch lower benefit than what has been recommended by the 7th Central Pay Commission.

It is not clear whether the media is bungling on this issue without confirming the authenticity of any such move by the Empowered Committee.

Surprisingly quite a large number of central government employees and the Central Government Employees Federations/Associations including the media are not aware that 7th CPC had already recommended a minimum of 32% increase in the basic pay. In fact the recommendation works out to more than 32% increase in basic pay and may go even up to 40% in most of the cases, since after multiplying the existing Pay and Grade Pay by a factor of 2.57 the resulting figure is fitted into the pay matrix at the next higher slab.

The following illustration shall make clear the percentage of increase in basic pay which come to more than 32% of the basic pay:

Under 6th CPC: Assumed Pay & G.P Rs.29490+ D.A at 125% Rs.36863= Rs.66,353
Under 7th CPC: Pay & G.P Rs.29490 x 2.57 factor = 75,789 to be fixed at the next slab of Rs. 77,700 at level 10 in the Grade Pay of Rs.5400
Fitment Benefit : Rs.77,700 – Rs.66,353 = Rs.11,347
Percentage of increase: 38.32% of the basic pay (Rs.11,347 / Rs.29490 =38.47%). The increase will be only 17.10% if both basic and D.A are to be added.(Rs.11,347 / 66,353 = 17.10%)

The VII CPC has arrived at a factor of 2.57 for multiplication with the pre-revised Basic Pay comprising pay in the pay band and grade pay to arrive at new basic pay thereby including 32% of increase in the basic pay. The VII CPC have recommended 32% hike uniformly to all the employees as fitment benefit to the existing pay and grade pay and raised the existing 2.25 factor to 257% or 2.57 factor.
(The increase come to 14.22% if both the basic pay and D.A. are reckoned. However it must be noted that none of the pay commissions in the past had projected the increase by including both basic pay and D.A but had taken only Basic Pay into account for arriving at the percentage of fitment benefit granted as a bonanza.)

THE FOLLOWING COMPARISON OF FITMENT BENEFIT GRANTED BY 6TH CPC AND THE 7TH CPC SHALL GIVE CORRECT PICTURE:

INCREASE GRANTED UNDER 6TH PAY COMMISSION:

i. The 6th CPC had granted approximately 40% increase on the maximum of 5th CPC basic pay scale without taking into account Dearness Pay and D.A as on 1/1/2006 for the purpose of projecting the increase. The fitment benefit of 40% was distinctly shown as Grade Pay.)

ii. The increase granted by 6th CPC works out to 21.5% only if D.P and D.A are to be included in basic pay (40/1.86* factor = 21.5%)

( *1.86 factor means: 1 is to be taken as 100 which stands for Basic Pay and .86 should be taken as 86% which constitute 50% of Dearness Pay +24% DA on both Basic Pay and Dearness Pay i.e. Basic Pay100 + D.P 50 =150 x 24% =36% totaling to 186 or 1.86 factor which the employees had already drawn under 5th CPC Pay Scale as on 1/1/2006)

INCREASE RECOMMENDED UNDER 7TH PAY COMMISSION:

i. The recommended increase in basic pay by 7th CPC without taking into account 125%D.A as on 1/1/2016 come to a minimum of 32% which may go upto 40% of basic pay comprising Pay in the pay band and Grade Pay depending upon the slab in which the 2.57 multiplication factor gets fitted into at various levels of pay in the pay matrix.

ii. The recommended increase come to only 14.22% if both the basic pay and the 125% D.A as on 1/1/2016 is taken into account.(32/2.25 =14.22%) In other words 2.57*-2.25** = 32.

(*2.57* factor means: 1 + 1.25 + 32 =2.57. While 1 stands for 100% Basic Pay comprising Pay in the pay band and Grade Pay, 1.25 stands for 125% D.A. as on 1/1/2016 and .32 stands for 32% increase in Basic Pay comprising Pay in the pay band and grade pay recommended as Fitment Benefit by VII CPC totaling to 257% or 2.57 factor.

(**2.25 means: 1 + 1.25. While 1 stands for 100% of Basic Pay comprising Pay in the pay band and Grade Pay, 1.25 stands for 125% of D.A. as on 1/1/2016 totalling to 225 or 2.25 factor which the employee was already drawing under 6th CPC Pay Scale as on 1/1/2016. Added to it is 32% fitment benefit on Basic Pay comprising Pay and Grade Pay totaling to 257 or 2.57 factor. In other words 2.25 + 32 =2.57 factor).

Thus it may be seen that if the media report is really true that the Empowered Committee of Secretaries are planning to revise the increase in fitment benefit to 30% of the Basic Pay alone, it is highly deplorable as it shall lead to still lower fitment benefit than what has been proposed by the 7th CPC which recommended 32% minimum increase in the basic pay by arriving at 2.57 factor. This 2.57 factor recommended by 7th CPC for multiplication of basic pay shall come down to 2.55 factor if the Empowered Committee of Secretaries are going to recommend 30% increase in basic pay alone as under:

Basic Pay = 100%
D.A. as on 1/1/201 =125%
Fitment Benefit =30%
Total 255% or 2.55 factor

CONCLUSION: It is high time, the Empowered Committee of Secretaries entrusted with the task of reviewing the recommendations of VII Central Pay Commission desist from taking any hasty decision without fully analyzing the ground realities as the result will be dismal if really such a move is on the anvi. This 32% minimum increase in Basic Pay comprising Pay in the pay band and Grade Pay recommended by VII CPC which come to only 14.22% increase if both basic pay and D.A is taken into account, has caused disgruntlement and anguish among all the central government employees. If there is going to be an increase of 25 to 30 percent on both basic pay and grade pay or 50 to 60 percent increase on basic pay alone, then there can be some contentment among the central government employees who have been desperately waiting for a pay hike for more than 10 years. What is required is a concerted and concrete effort to solve the grievances relating to pay hike, in consultation with the stake holders with a pragmatic approach to resolve the issues.

M.DORAI
Deputy Director
ESIC MODEL HOSPITAL
(Ministry of Labour, Govt. of India)
Rajajinagar,Bangalore-560010- is the Author of this article

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6 comments:

Anonymous said...

Mr. Dorai, do not worry. Media people do not know real implications. They file mere superficial reports. Something solid will come out ultimately. DPS Chowhan

pankaj verma said...

I m astonished how this misleading article is finding place in this site. Either the author is fictitious or the site itself is misleading.
I will quote only obe example. Take the starting salary of gr a officer in 5th pay commission. It was 8000 basic+4000 dearness pay+ 2880(da @ 24%)=14880. It jumped to a whopping 21000(15600 basic+5400gp). In percentage terms it was close to 41% (6120/14880) increase. As it can be clearly seen this increase was on combined basic+ dearness pay+ dearness allowance.
Compare this with present 7th pc which has given a paltry 14% increas in baaic+ da terms.
So pl do not mislead.

Sham Bansal said...

Dear M.DORAI
Please read the media report carefully. In the media report there is 30% more hike than the 7th pay commission report submitted by A. Mathur. That is if 7th pay commission recommended Rs. 18,000 as a minimum salary then Empowered Committee of Secretaries recommended 30% (18000 x 30% = Rs. 5400) more salary. It means total salary will be 18000+5400= Rs. 23,400. In this way 18,000 Basic pay will move to 23,400.

kamaraju said...

SIR
THE ANALYSIS IS NOT CLEAR AS IT IS PRESUMED THAT EMPOWERED COMMITTEE MAY RECOMMEND 30%HIKE ON 2.57 WHICH WAS RECOMMENDED BY PAY COMMISSION . PLEASE RECONCILE

G.Rajamanickam said...

I would like to request the readers to go through the fitment benefit for fixing the revised pay recommended by the earlier pay commissions. While, the third pay commission recommended merely 5 % of basic pay subject to mimimum of Rs.15, the fourth pay commission recommended 20% ofpay subject to a minimum of Rs.75. In addition, Rs.200/- being the Interim Relief awarded in two instalments were also taken into account for fixation of pay. The fifth CPC recommended 40 % of pay as fitment benefits. In addition, Rs.100/- plus 10 % of pay granted as Interim Reliefs I & II respectively were also taken into account for fixation of pay. The sixth CPC recommended only 40 % of maximum of pay of the scale as fitmenet benefit. So, I am sure Goverment will not reduce the fitmenet benefit and therefore there is no need to worry much based on the media reports. Defitenly the benefit will not be less than 40 % of existing pay.

Subba Rao Cheemalakonda said...

The percentage of increase is to be calculated on basic + DA i.e. if basic pay is 10000/-, after adding DA @ 125% the pay will be Rs.2250/-(which we are already getting). The 7th CPC recommended multiplication factor of 2.57 and the new basic pay works out to Rs.2570/-. That means an increase of 14.2%. The 7th CPC mentioned the same in its report.



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