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7th Pay Commission Fixation of Pay : Initial Appointment on or after 1.1.2016

7th Pay Commission Fixation of Pay : Initial Appointment on or after 1.1.2016
Fixation of Pay as per the recommendations of 7th Pay Commission : Initial Appointment on or after 1.1.2016 may be fixed as follows…
Government offices are currently buzzing with excitement as employees await the recommendations of the Seventh Pay Commission.

While the babus may have reason to smile as they may soon have more money in the pocket, it might not be equally good news for others.

What is it?
A Pay Commission is appointed by the government once every 10 years to look at the pay structure of Union and State government employees and pensioners. Typically, the commission takes 18 months to submit its report. The Seventh Pay Commission was constituted in February 2014 under the chairmanship of Justice Ashok Kumar Mathurto submit its recommendations by August 2015.Pay commissions study the current pay scalesand make recommendations on not just pay increases, but also pay structure. For example,the Sixth Pay Commission recommended that transport allowance, which was a lump-sum amount earlier, be paid along with a Dearness Allowance component. Likewise, the House Rent Allowance calculation was pegged to a percentage of pay. From the Seventh Pay Commission, there are expectations of tweaks to retirement age, performance-linked pay andflexible work hours for women and employees with disabilities, apart from pay hikes. The recommendations are expected to be effective from January 1, 2016. If there are delays, the pay revisions would be done with retrospective effect.

Why is it important?

For three reasons. One, it has an impact on government spending and fiscal deficit. For example, after the Sixth Pay Commission was implemented, the fiscal deficit that year doubled to 6 per cent in 2008-09, partly due to the resulting increases.Currently, Central government pay and allowances account for 1 per cent of the country’s GDP. This could increase if the pay hikes are significant. Based on the medium-term expenditure framework presented to Parliament, a 16 per cent pay increase is likelyfrom the Seventh Pay Commission. This couldadd 0.2-0.3 per cent of GDP by way of additional expenditure in 2016-17, estimates DBS.Two, if the government sticks to its fiscal deficit targets, the higher outgo may entail cuts in other items of spending, including capital expenditure.Three, pay increases granted by the commission can act as a stimulus to the economy by boosting the consumption leg of GDP. At last count, India employed 48 lakh Central government employees and 55 lakh pensioners and over one crore State and local government employees. The Fourteenth Finance Commission estimates that after the Sixth Pay Commission, pay and allowances toCentral government employees more than doubled in a four-year period between 2007-08 and 2011-12.

Why should I care?

If you are a government employee, retiree or a job aspirant, you probably would be watching out eagerly for the report. As an investor, you can consider consumption as a theme to bet on — there is a co-relation between pay commission increases and discretionary spending in urban India. Higher disposable income in the hands of the people could aid automobile and property sales.The country’s fiscal deficit is a cause for concern as it impacts tax policies.

1) Inadequate pay compared to talent.
2) Lack of promotions and better increment rate.
3) Equal pay for equal work.
4) Non-filling up of vacant posts and increased work load.
5) Allowances to be paid as per market rate.
1) Inadequate pay compared to talent:
The person joining a Government Service is not just for the employment is for a whole career, if a person joins a Government Service he will quit/ retire from the job only after putting 30 years service or more. In case of the person joining a private company he will jump from one company to another at least five times in thirty years.

The talented persons from all over the country are moving to IT, BT and private sectors, rather than Central Government sector. Because of the lower salary / pay structure in Central Government sector compared to IT and BT sectors and complex nature of rules and regulations in Central Government sector and also the skill and merit of the worker/ employee is not into account in Central Government sector.

Today, the weakest link in respect of any government policy is at the delivery stage. This phenomenon is not endemic to India. Internationally also, there is an increasing emphasis on strengthening the delivery lines and decentralization with greater role being assigned at delivery points, which actually determines the benefit that the common citizen is going to derive out of any policy initiative of the government.

More the talented persons are there in Government services, more the delivery of the government schemes will be there, thus the Government machinery will be more effective and common man will benefit a lot.

Main consideration in the private and public sector being ‘profit’, and in Central Government it is “service” even through Railways, Income Tax & Central Excise are revenue earning departments, hence an equal comparison with the Government is not going to be ever possible. Performance for the Government is usually not measured in terms of profit, but in terms of achieving societal goals.
The time scale gap between one posts to another should be uniform rate from starting to end, starting from Rs 26,000 to Rs 2, 60,000.
The minimum wage should be calculated using Dr Aykroyd formula and following 15th ILC norms and four units should be taken into account not three units as followed by the 6th CPC.

The pay should fixed taking in following factors.
a) The educational qualifications.
b) The level of responsibility.
c) The skill of the work.

The earlier pay commissions were only taking into account only educational qualifications into account.

Only around 8 to 9 % of the total Govt revenue collection is spent on wages of Central Government employees, compared to 20% to 25% of the revenue spent on wages in private sector.
The cost of living (prices of essential items and other items) has gone by over 250% during last 10 years, compared to 113% DA. The prices are continuously rising.

The Government is a model employer, hence the wages should be provided with the needs and to attract the talented and skilled persons.

2) Lack of promotions and better increment rate.
Today there are persons who have not even got two promotions in his entire career, The MACP scheme is not that much effective, lack of promotions in Central Government sector compared to IT and BT sectors.

One should get five promotions in promotional hierarchy during his service to motivate him to work more. As the Government employee put more and more service, he will be more trained to perform his duties in a better befitting manner. Thus the Government is more beneficial as good quality of work can be expected of him.

The family responsibility will increase with age. There should be adequate financial protection for him, the better rate of increment should motivate him to work more from the present 3% to 5%. On promotion one should get a minimum salary increase of Rs 3000/- per month as he will perform higherduties.

3) Equal Pay for Equal work.
For the same post which include similar duties and responsibility. There are different pay scales/ Grade Pay existing for same nature of duties and similar recruit qualifications. This anomaly should be rectified.

Grant of Grade Pay Rs.4800 to all Supervisors cadre. The gazetted Group “B” post should start from Rs 5400/- GP.

4) Non-filling up of vacant posts and increased work load
In 1990 the Population of the country is 85 crores and the Central Government Employees strength is 40 lakhs in the year 2014 population of the country is 125 crores, whereas the Central Government Employees strength is just 31 lakhs.

Non-filling up of vacant posts has resulted in increased work load on the existing employees. The strength of Central government employees should increase considerably.

5) Allowances to be paid as per market rate:
The house rent allowance should be from Rs 7000/- per month to Rs 55,000/- per month. All allowances such as Tour DA, OTA, Night Duty, CEA (tuition fees) , Cashier Allowances, etc should be increased by three times.

The all allowances should also be paid net of taxes which has been examined by 5th CPC in para no 167.

The staff side (JCM) has represented well the above important issues of the Central Government Employees before the 7th CPC, we sincerely hope the 7th CPC will address and resolve the above issues.
Let us wait patiently for the 7th CPC to submit its report and then we can deliberate on the report and do the needful action.