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Showing posts with label 7TH PAY COMMISSION. Show all posts
Showing posts with label 7TH PAY COMMISSION. Show all posts

TN 7th PAY COMMISSION - SIMPLE CALCULATION SOFTWARE ( SG, BT,PG , LAB ASST AND JA )

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7th Pay Commission notification to be issued after states polls

 
The notification to put into effect the Seventh pay commission recommendation will be issuedafter the completion of states assemblies’ poll process as the model code of conduct is currently in place, sources of Finance Ministry said on Wednesday.The assemblies’ election of Tamil Nadu, West Bengal, Assam, Kerala and Puducherry states, which will be held from April 4 to May 16 and the counting of votes in the states will take place on May 19 but the model code of conduct will remain in place till May 21.So, it is believed that the government will announce Seventh pay commission award after the end of model code of conduct of states assemblies election.
The government doesn’t want to give any chance to the Opposition to deter its image in the polls and hence, sources, said that the announcement of the dates of the the model code of conduct of states polls seems to be the cut-off point for notification of the Seventh pay commission award.
inThe Seventh pay commission recommendationswill benefit 48 lakh central government employees and 52 lakh pensioners including dependents.
“The BJP led central government decided execution time of the pay commission’s proposals in April but the Empowered Committee of Secretaries headed by cabinet Secretary can’t sort out some anomalies of Seventh pay commission recommendations likescrapping of advances, allowances and minimum pay before declaration of states Assemblies polls,” sources said.Sources also said the Implementation cell of theEmpowered Committee of Secretaries for the Seventh pay commission recommendation in Finance Ministry works hard to send a summaryof the pay commission implementation to PMO for its nod. After PMO’s nod, it would be placed before the cabinet for its nod through cabinet secretary.
Sources said the Seventh Pay Commission recommendations implementation notification will be issued in June, after cabinet nod.The Seventh Pay Commission was set up by theUPA government in February 2014, The Commission headed by Justice A K Mathur submitted its 900-page final report to Finance Minister Arun Jaitley on February 19, recommending 23.55 per cent hike in salaries and allowances of Central government employees and pensioners.The panel recommended a 14.27 per cent increase in basic pay, the lowest in 70 years.
The previous 6th Pay Commission had recommended a 20 per cent hike, which the government doubled while implementing it in 2008.The Seventh pay commission recommended fixing the highest basic salary at Rs 250,000 and the lowest at Rs 18,000and its increased the pay gap between the minimum and maximum from existing 1:12 to 1: 13.8The government constitutes the Pay Commission almost every 10 years to revise thepay scale of its employees and pensioners, often these are adopted by states after some modifications. However, the Seventh Pay Commission suggested to discontinue the practice of appointing pay commissions in future.

7th Pay Commission report on Fixed Medical Allowance:

 

Fixed Medical Allowance – The existing amount of Rs.500 p.m which was raised from 19.11.2014 to continue

The Commission has received representations seeking enhancement in Fixed Medical Allowance, currently payable at the rate of ₹500 per month for pensioners not covered under Central Government Health Service (CGHS).
It is granted to pensioners for meeting expenditure on day to day medical expenses that do not require hospitalization, presently payable at the rate of ₹500 pm. Demands have been received to increase the rate of this allowance to ₹2,000 pm.
Pensioners are not covered under the CS (MA) Rules. Pensioners residing outside CGHS areas are entitled to Fixed Medical Allowance (FMA) @ ₹500 per month for their OPD/IPD needs. Such pensioners can also avail IPD/OPD under CGHS subject to some conditions.
The Commission has received representations seeking enhancement in Fixed Medical Allowance, currently payable at the rate of ₹500 per month for pensioners not covered under Central Government Health Service (CGHS).
Analysis and Recommendations :
The Commission notes that this allowance was enhanced from ₹300 pm to ₹500 pm from 19.11.2014.
As such, further enhancement of this allowance is not recommended.

7CPC Report – Detrimental to Central Government Employees – 5 Term MP says:

 

7CPC Report – Detrimental to Central Government Employees – 5 Term MP / MPLA observes in his blog – 7th Pay Commission’s Recommendations are not beneficial to low paid employees and tilted towards higher level officers

7th Pay Commission report detrimental to low paid central government employees - Ajay Maken
Mr.Ajay Maken, Former Union Minister from Congress Party and five term Member of Parliament and Legislative Assembly, observes that 7th Pay Commission Report provides meagre  benefits while comparing the salary increase recommended by previous Pay Commissions.
The Chairman of Seventh Central Pay Commission Justice Ashok Kumar Mathur has since presented voluminous recommendation consisting of 875 pages to Hon’ble Finance Minister. When we go through the recommendations it appears that it anti low paid employees and failed to improve their financial condition, short of suggesting measures for better and encouraging working conditions for them. It is tilted towards higher level officers.
2.​The following important issues on which recommendations are made show the negative approach of the commission towards low level employees, which may be due to anti employee actions ofthe present Government. After independence seven Pay Commissions have been constituted all by Congress or Congress led Governments. NDA Government during the year 2003 was in power but refused to constitute 6th Pay Commission in spite of recommendation of 5th CPC to constitute 6th Pay Commission on 1st Jan, 2003 so that its recommendations could be implemented wef 1st Jan, 2006. This proves beyond doubt that the present BJP Government too is not serious to improve working condition and in financial upgradation of majority of employees. Brief details of main recommendations are:-
Fitment: For fixation of pay effective from 1st Jan, 2016, fitment factor of 2.57 has been proposed for application uniformly for all the employees. It includes a factorof 2.25 is on account of Dearness Allowance neutralisation, assuming that DA would be 125 percent at the time of implementation of the new scale out of 2.57 of fitment formula recommended. The hike will only be 14.29 percent.
The enhancement of pay by 14.29% is very depressing for the employees in past after submission of 5th and 6th Pay Commissions report the minimum hike given was 40%.
(A) It has been our consistent demand to reduce gap between the lowest paid and the highest paid employees from 1:12, recommended by 6th CPC to 1:8 but instead of reducing the gap it has been further increased by the 7th Pay Commission to 1 to 14.
(B) As per para 5.1.27 of the report, “it is proposed that fitment factor of 2.57 is being applied uniformly for all employees.” Whereas at Table 5 : Pay Matrix (Civilian Employees) for level 1 to 5 it is 2.57 and in respect of remaining higher levels except level 13 it ranges between 2.62 to 2.81. It proves that senior officers have been favoured by the Commission in fitment process.
(C) 6th Pay Commission had recommended annual Increment between 3 to 4% of Pay plus Grade Pay whereas Seventh Pay Commission has restricted it to 3% only.
(D) The 7th Pay Commission has proposed to withhold annual increments of those employees who are not able to meet the benchmark either for MACP or regular promotion within first 20 years of service, under the given condition an employee will be left with no option but to leave the job and seek retirement.
(E)Recommendationto withdraw some benefits which employees are already availing:
(i) In the name of parity in the rank of Assistants, between the field staff and headquarter staff grade pay of Rs 4,600 of Asstts of CSS has been placed in the new pay matrix in Level 6, the level corresponds to pre-revised GP of Rs 4200. Similarly the corresponding posts in the Stenographers cadre willalso follow same parity and thus will be deprive of GP of 4600.
(ii) Non-functional selection scale with the GP of 4200 was granted to 30% Upper Division Clerks in CSS and Allied Offices, which is now being withdrawn at the cost of UDCs awaiting grant of NFSS.​
(iii) At present two additional increments are granted at the time of promotion to Under Secy/PPS in CSS/CSSS it is suggested to abolish the benefit.
(F) Recommendation to abolish Allowances, reduce percentage, de-link benefit of DA:
(i) The quantum of percentage based allowances has been reduced, the 6th CPC had doubled it whereas 7th Pay Commission has suggested rationalisation by a factor of 0.8 (para 8.2.3). This will reduce present percentage based allowance for example House Rent Allowance which is at present 30, 20 and 10% in respect of Class X, Y and Z category of cities will come down to 24, 16 and 8% .In the same pattern percentage of other allowances will also be reduced.
(ii) All non-interest bearing Advances viz Festival etc have been abolished.
(ii)Motor Car, Motor Cycle/Scooter/Moped advances have been abolished.
(iii) 52 Allowances presently available to employees will discontinue.
(iv) Identities of 36 allowances have been abolished as separate and proposed to be subsumed with existing or newly introduced allowances.
(v) Transport Allowance which is at present linked with DA, with release of every additional instalment of Dearness Allowance, TA is also proportionally increases, this will be done away.
(G)Rates of contribution by various levels of employees towards insurance coverage have been exorbitantly increased, the details are:
Level of Employee Present Monthly Deduction​ Proposed Monthly Deduction
10 and above Rs 120/- ​​​​Rs 5,000/-
6 to 9 Rs 60/- Rs 2,500/-
1 to 5 Rs 30/- Rs 1,500/-
(H) Process of Cadre Review has been made very difficult.​​​​
​In short Central Government Employees are frustrated and disappointed with the major recommendations of the Commission. It is unfortunate that the employees, who were given 40% hike in their respective pay has now been recommended only 14.29%. This is unjust and humiliating for the beneficiaries.
​We have decided to express our resentment and demand at least 40% hike in the pay of various categories of employees.
Source: Ajay Maken Blog

7th Pay Commission Report on Leave Encashment of EL Vivek December 13, 2015 7th Pay Commission :

 

7th Pay Commission Report on Leave Encashment of EL – Existing Earned Leave ceiling of 300 days to continue.

7th CPC has received representations seeking raising the ceiling limit of 300 days to 450 days for purposes of Leave encashment of Earned Leave.
leave encashment permitted at the time of retirement :

CPC Earned Leave
IV CPC 240 days
V CPC 300 days
VI CPC 300 days #
# Excludes 60 days EL encashment during LTC
Analysis and Recommendations : The Commission noted that serving employees are entitled for encashment of Earned Leave up to 60 days while in service. This will not to be deducted from the maximum number of Earned Leave of 300 days encashable at the time of retirement.
The recommendations in relation to pay of both the civilian and defence forces personnel will also lead to a significant increase in the pay drawn and therefore in the total amount of leave encashment available for an employee.
Therefore the present ceiling of 300 days Earned Leave for encashment at the time of retirement will continue.

7TH CPC WIL INCREASE CENTRAL GOVERNMENT PAY ONLY BY 15%. SHOULD WE ACCEPT?

 

7 TH CENTRAL PAY COMMISSION REPORT PDF COPY
7th Pay Commission Proposed Pay Structure.
LAST UPDATED 02.09.2015
Proposed Pay Structure in the Final Memorandum of NC JCM to 7th CPC
Proposed pay scale minimum.
Sl. No.Pay scale No.Present PBPB No.Grade PayProposed minimum of the pay scale.
1S.15200-20200PB.1180026000
2S-25200-20200PB 1200033000
3S-35200-20200PB 1280046000
4S-49300-34800PB 2420056000
5S-59300-34800PB 2480074000
6S-69300-34800PB 2540078000
7S-715600-39100PB 3540088000
8S-815600-39100PB 36600102000
9S-915600-39100PB 37600120000
10S-1037400-67000PB 48900148000
11S-1137400-67000PB 410000162000
12S-1275500-80000HAG0193000
13S-1380000( Fixed )Apex scale.0213000
14S-1490000 (Fixed)Cabinet Secy0240000
Table 7.2.

New Pay scale minimum

SL.No.   Grade pay of 6thCPC     Minimum of the  new pay scale
1          180026000
2190031000
3200033000
4   240041000
5   280046000
6420056000
7  460066000
8    480074000
9   540078000
105400 in PB388000
11  6600102000
12    7600120000
13 8700139000
14 8900148000
15  10000162000
16   12000193000
17  75000-80000202000
18   80000 fixed213000
1990000 fixed240000
National Council JCM , Staff Side has finalised its Memorandum to be submitted to 7th Pay Commission and it has been posted in its website NCJCMstaffside.com for all central government employees. The Full Final Memorandum consists 98 pages and the download link is provided below this post
Chapter —VII
Proposed Pay Structure and Rate of Increment
In the preceding chapters we have dealt with the various principles of pay determination as was enunciated by the successive Pay Commissions. The 6 CPC introduced the new concept of Pay Band and Grade Pay. We are not able to comprehend any logical methodology having been adopted by the 6th CPC in constructing the Pay Band and Grade Pay. In the ultimate analysis, we found that there had been no uniform multiplication factor. It varied from 2.2 time to 3. The changes effected by the Government while implementing the recommendations of the 6th cpc further compounded the confusion and making t more irrational and arbitrary. The 6 cPC in their report stated that they have upgraded certain pay scales having appreciated the contention made by the employees organizations. They merged certain other pay scales in an effort to delayering the functions. But the new pay that emerged from such upgradation/merger was not equivalent to the higher pay scales in the said group. For instance, the erstwhile pay scales of Rs.5000-8000, 5500-9000 and 6500-10500 were merged. The multiplication factor for pay band construction was 1.86 times of the minimum. Therefore the pay band for the pre merged pay scales was determined to begin at Rs.9300/-. Having merged, the pay band must have begun at 12,090/-, i.e. 1.86 times of 6500/- in which the other pay scales were merged.
7.2 The manner in which the Grade pay was devised is also questionable. At the lower level the Grade Pay progresses @ Rs.100/- ,i.e. 1800, 1900, 2000, etc. The pay in the Band + Grade Pay at the entry level is 5200 + 1800 = 7000. An employee is entitled for 3% increment every year. He gets a financial benefit of Rs. 210 every year on account an increment whereas on promotion his grade pay gets increased by just Rs.100/. only. The Grade Pay was devised at 40% of the maximum of the pre revised time scale of pay. The maximum of any time scale of pay will depend upon the rate of increment and the span of the scale of pay. The ratio between the minimum and the maximum of all pay scales was not uniform, rather it could not be uniform. Therefore, prescribing Grade Pay as a percentage of such variable maximum, in our opinion, was erroneous. Normally fitment benefit represent the gap between pre revised minimum and the revised minimum. The 6th CPC recommendation of Grade Pay did not serve this purpose also. Having been expressed in absolute quantum amount it gave varied benefit in different pay bands as also at different stages in the same pay bands.
7.3 The Grade Pay system brought about various anomalies, which were raised at the NAC but found no resolution despite discussions on several occasions in the last 6 years. We are of the firm view that the 7” CPC should revert to the Pay Scale System which has been time tested. We have constructed the pay scales maintaining the relativities with the time scale of pay suggested by both 5’ and 6th cPC•
7.4 While constructing the pay scales we have taken the rate of increments at 5% instead of 3% presently available. We have done so on the ground that most of the PSUs including the banking industries provide the incremental rate at 5% and over a period of time it raises the salary level of the personnel. We therefore request that the 7th CPC may recommend the rate of annual increment at 5%. Incidentally we may also state that the uniform date of increment prescribed by the 6th CPC has encountered certain problems and anomalies. We, therefore, suggest that the 7th cpc may recommend, for administrative expediency, two specific dates as increment dates, Viz. 1st January and 1st  July. Those recruited/appointed/promoted during the period between l January and 30th June will have their increment date on 1stt January and those recruited/appointed/promoted between 1st July and 31st December will have it on 1st  July next year. This apart we request the Commission to specifically recommend that those who retire on 30th June or 31St December are granted one increment on the last day of their service.
7.5 We have also felt that a further reduction in the number of pay scales is needed. While constructing the pay scales we have removed those pay scales pertaining to Grade Pay of Rs.1900, 2400, 4600, 8700 and the scale of pay of Rs. 75500-80000. We are of the opinion that the instrument of Special Pay which was in operation earlier should be brought back to address the need of intermediary grades in certain organizations. The Associations and Federations representing the employees and officers of various departments and various categories will submit their memorandum indicating the pay scales to be assigned to the categories of the
employees and officers they represent taking into account the nature of functions assigned to those categories separately.
7.6 Presently, functional promotion is made to the next hierarchical position whereas MACP promotion ¡s Grade Pay based, irrespective of the fact whether a particular Grade Pay exist in the hierarchy or not in the concerned department. Our suggestion to reduce the number of pay scales go a great extent to obviate the difficulty encountered due to the dual system of promotion.
7.7 We have constructed open- ended pay scales. This is to ensure that no employee stagnates without increment. The pay of the Secretary and the Cabinet Secretary has been kept as a fixed amount as has been the recommendation of the 6th CPC. In consonance with our view on the need for further de-layering, we have suggested only 14 Pay scales indicating in the table the minimum of each of them. The said 14 pay scales are given below:
In Table 7.2, the corresponding pay scales of the 6” CPC recommended Grade Pay are given for reference.
Table No. 7.1.
Big Expectations from 7th CPC and Low possibilities projected by Union Finance Minister!
Honourable Finance Minister Shri.Arun Jaitely had spoken about the possible impact of 7th CPC recommendations in Parliament.
 The Speech is critically reviewed by Comrade Elangovan of DREU.
Big Expectations from 7th CPC and Low possibilities projected by Union Finance Minister!
Honourable Finance Minister Shri.Arun Jaitely had spoken about the possible impact of 7th CPC recommendations in Parliament.
 The Speech is critically reviewed by Comrade Elangovan of DREU.

I am reproducing the comments of Comrade Elangovan for the consideration of our members: 

 R.ELANGOVAN,
WORKING PRESIDENT, DREU
 1.     The Medium Term Expenditure Framework statement has not yet been uploaded in Finance Ministry’s website. However I have taken the figures provided by print media including The Hindu. As per their statement the expenditure on salaries will rise by 9.56% in the fiscal 2015-16 as a result of 7th CPC implementation over the normal estimated expenditure in the 2015-16 budget to Rs.100619 crores. This means that the expenditure projected was Rs.91,839cr which if increased by 9.56% becomes Rs.100619 crores.
2.     While going through the earlier framework statements I have come to the conclusion that the ‘salaries’ shown is pay with normal increments plus DA projected.
3.     As per the estimated strength and provision there of statement laid as part of finance budget, the normal projection as PAY was Rs.60731 cr and so DA is Rs 31,108 as deducted from Rs 91 839 cr. The budget document does not give the DA expenditure separately. It gives the total expenditure on all allowances. I have therefore arrived at the figure based on calculations. However I have sought the expenditure on DA, HRA, and Transport Allowance separately through RTI.
4.     The increase proposed is Rs.100619 cr from Rs.91,839cr  which means that there will be an increase of Rs.8780 cr. There won’t be any DA after 1-1-2016 up to 31-3-2016 in the fiscal 2015-16.Therefore the whole increase is on basic pay in this fiscal.
5.     As we have already seen that the basic pay is Rs.60731 cr. the increase of Rs.8780 cr. is over this Rs.60731.This increase is 14.45% only. The expenditure projected for 2016-17 is Rs.1,12,000cr which is Rs.11,400 more over 2015-16 which works out to 11.32%. This is due to Increment, DA,HRA, TRA etc. The projection for 2017-18 is 1,16,000 cr.
6.     If 40%  of Basic Pay is to be given, the increase of expenditure in the fiscal 2015-16  must  be Rs. 24000 cr as against the Rs. 8780 cr. The demand of JCM Staff side is that there must be an increase of 371% of basic pay as on 1-1-2016. With the 119% DA we would be drawing 219% already. The real increase demanded is 152% of Basic Pay. So not the 152% or 40% of 5th and 6th CPC is intended to be given to us. Only around 15% is going to be given. As The Terms Of Reference of 7TH CPC directs them to recommend only what is‘FEASIBLE AND DESIRABLE’to the Government. Now the Government In Parliament states only 15% is FEASIBLE AND DESIRABLE. ARE WE TO ACCEPT IT.? Some PSUs got 15%. But that is for 5 years. But for Central Government Employees it is for Ten Years. Are We To Accept?

7.     Pension expenditure for civilian pensioners was estimated to be Rs.27,145cr and defence pension Rs.54,500 cr. The total is Rs.81645 cr. This is expected to go up to Rs.88521 cr, which is an increase of Rs.6876 cr.As there will be no Dearness Relief for the fiscal 2015-16 the increase is to be accounted only to Basic Pension.

8.     I have sought the expenditure break up for dearness relief under RTI. However the rough calculation shows a near increase of same 15% in Pension.

9.     The impact of 6th CPC on expenditure as per estimated strength of establishment and provision thereof in respect of Central Government civilian employees was as follows:
ARREARS Rs 26084 cr.  For three  years mostly on Pay and DA regular PAY Increase per annum:   Rs 8685 cr. These are actual figures. The 219% of Rs. 8685 cr is  Rs.19000 cr. EVEN THIS IS NOT GIVEN.

10. We must issue a warning to the government afresh demanding acceptance of our demand. I recall my earlier note wherein I had quoted BibekDebroy’s report that the 7th CPC will not be that destabilising to the Government as that of 6th CPC. GOVERNMENT PROVES THAT.



I am reproducing the comments of Comrade Elangovan for the consideration of our members: 




  

7TH CPC WIL INCREASE CENTRAL GOVERNMENT PAY ONLY BY 15%.

SHOULD WE ACCEPT?

 R.ELANGOVAN,

WORKING PRESIDENT, DREU



 1.     The Medium Term Expenditure Framework statement has not yet been uploaded in Finance Ministry’s website. However I have taken the figures provided by print media including The Hindu. As per their statement the expenditure on salaries will rise by 9.56% in the fiscal 2015-16 as a result of 7th CPC implementation over the normal estimated expenditure in the 2015-16 budget to Rs.100619 crores. This means that the expenditure projected was Rs.91,839cr which if increased by 9.56% becomes Rs.100619 crores.



2.     While going through the earlier framework statements I have come to the conclusion that the ‘salaries’ shown is pay with normal increments plus DA projected.



3.     As per the estimated strength and provision there of statement laid as part of finance budget, the normal projection as PAY was Rs.60731 cr and so DA is Rs 31,108 as deducted from Rs 91 839 cr. The budget document does not give the DA expenditure separately. It gives the total expenditure on all allowances. I have therefore arrived at the figure based on calculations. However I have sought the expenditure on DA, HRA, and Transport Allowance separately through RTI.



4.     The increase proposed is Rs.100619 cr from Rs.91,839cr  which means that there will be an increase of Rs.8780 cr. There won’t be any DA after 1-1-2016 up to 31-3-2016 in the fiscal 2015-16.Therefore the whole increase is on basic pay in this fiscal.



5.     As we have already seen that the basic pay is Rs.60731 cr. the increase of Rs.8780 cr. is over this Rs.60731.This increase is 14.45% only. The expenditure projected for 2016-17 is Rs.1,12,000cr which is Rs.11,400 more over 2015-16 which works out to 11.32%. This is due to Increment, DA,HRA, TRA etc. The projection for 2017-18 is 1,16,000 cr.



6.     If 40%  of Basic Pay is to be given, the increase of expenditure in the fiscal 2015-16  must  be Rs. 24000 cr as against the Rs. 8780 cr. The demand of JCM Staff side is that there must be an increase of 371% of basic pay as on 1-1-2016. With the 119% DA we would be drawing 219% already. The real increase demanded is 152% of Basic Pay. So not the 152% or 40% of 5th and 6th CPC is intended to be given to us. Only around 15% is going to be given. As The Terms Of Reference of 7TH CPC directs them to recommend only what is‘FEASIBLE AND DESIRABLE’to the Government. Now the Government In Parliament states only 15% is FEASIBLE AND DESIRABLE. ARE WE TO ACCEPT IT.? Some PSUs got 15%. But that is for 5 years. But for Central Government Employees it is for Ten Years. Are We To Accept?



7.     Pension expenditure for civilian pensioners was estimated to be Rs.27,145cr and defence pension Rs.54,500 cr. The total is Rs.81645 cr. This is expected to go up to Rs.88521 cr, which is an increase of Rs.6876 cr.As there will be no Dearness Relief for the fiscal 2015-16 the increase is to be accounted only to Basic Pension.



8.     I have sought the expenditure break up for dearness relief under RTI. However the rough calculation shows a near increase of same 15% in Pension.



9.     The impact of 6th CPC on expenditure as per estimated strength of establishment and provision thereof in respect of Central Government civilian employees was as follows:

ARREARS Rs 26084 cr.  For three  years mostly on Pay and DA regular PAY Increase per annum:   Rs 8685 cr. These are actual figures. The 219% of Rs. 8685 cr is  Rs.19000 cr. EVEN THIS IS NOT GIVEN.



10. We must issue a warning to the government afresh demanding acceptance of our demand. I recall my earlier note wherein I had quoted BibekDebroy’s report that the 7th CPC will not be that destabilising to the Government as that of 6th CPC. GOVERNMENT PROVES THAT.

7 IMPORTANT POINTS FOR 7THPAY COMISSION:

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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…
SEVENTH PAY COMMISSION RECOMMENDATIONS EXPECTED TO BE EFFECTIVE FROM JANUARY 1, 2016, IF DELAYS, PAY REVISIONS WOULD BE DONE WITH RETROSPECTIVE EFFECT 
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.

7th Pay Commission Likely to Hike Salaries By 40%: Credit Suisse:

 
 Central government’s salary expenditure will exceed Rs 1 lakh crore in the current fiscal and is projected to increase further with the recommendations of 7th Pay Commission, posing risk to public finances, Finance Ministry said todayAccording to the Medium-Term Expenditure Framework Statement tabled in Parliament, the salary outgo of central government employees will go up by 9.56 per cent to Rs 1,00,619 crore in current fiscal.

The pace will increase further in 2016-17 at 15.79 per cent to Rs 1.16 lakh crore with the likely implementation of the 7th Pay Commission award, said the statement tabled by Finance Minister Arun Jaitley in Parliament.\
The outgo towards salary will further rise in 2017-18 to over Rs 1.28 lakh crore.
“The award of VII Central Pay Commission (CPC) and its impact on government finances poses a risk,” said the statement.
It also raised concerns about the rising pension bill of government employees saying it will rise to Rs 88,521 crore in current fiscal. It has been pegged at over Rs 1.02 lakh crore in 2016-17, and over Rs 1.12 lakh crore in 2017-18.
“Like in salaries, higher than normative growth has been provided for the projection of outlay on pensions during 2016-17. For the second year of the projection (2017-18), a normative growth has been assumed. Award of VII CPC and its impact on Government finances poses a risk,” it added.
The recommendations of the 7th Pay Commission, which was set up by in February 2014, is likely to be implemented from January 1, next year.
 
The 7th Pay Commission is likely to raise the salaries of government employees by up to 40 per cent, said Neelkanth Mishra, India equity strategist of Credit Suisse. The Pay Commission will submit its recommendations in October and it will be implemented by next year.
 

"As the Pay Commission numbers come through there could be a 30-40 per cent increase for each  individual. It won't be as big as last time because it was driven by a lot of arrears but definitely a large number of government employees will come into the pay bracket which can afford to have, for example,  four-wheelers," he said in an interview with NDTV. (Watch the full interview)



Credit Suisse says about one-third of India's middle class is employed by the government and as the 7th Pay Commission comes through, there will be an improvement in discretionary spending.



"In Tier 3, Tier 4 towns where government employees are 50-60 per cent of the middle class, it is very likely that real estate markets will take off again," Mr Mishra said.



Once the Pay Commission submits its recommendations in October, it will take 3-6 months for the Centre and the states to announce its implementation, Credit Suisse said.



Gujarat and Madhya Pradesh have already indicated that they are going to implement the 7th Pay Commission recommendations from January 1, 2016, he said.



As clarity emerges on the 7th Pay Commission, consumption will see an uptick and that could act as a stimulus to the economy, the brokerage said.



However, Mr Mishra struck a note of caution. "Clearly if you see a third or 35 per cent of your middle class getting a 40 per cent or 30 per cent jump in compensation in one shot, the fears of inflation will rise." Expectations of rate cuts can get pushed out and some possible fiscal pressures can emerge, he warned.