National Council (Staff Side)
Joint Consultative Machinery
for Central Government Employees
13-C, Ferozshah Road, New Delhi - 110001
No.NC-JCM-2017/7th CPC /Fin
August 14 2017
The Additional Secretary,
(Sh. Pramod Kumar Das)
Government of India,
Department of Expenditure,
Ministry of Finance,
North Block, New Delhi
Dear Sir,
We write this with reference to the discussions the staff side had with
you on 21st July, 2017,when the official side explained the various
recommendations of the Allowances Committee and the Government's
decisions thereon. It is however, our considered opinion that the said
allowances committee did not consider various submissions made by the
Staff side both orally and in writing especially on those allowances,
which has a universal application. Had it been really addressed, the
reduction in the transport allowance in the case of employees in the
lower strata of hierarchy would not have happened. No justification had
been advanced by the 7th CPC for the reduction of the House rent
allowance rates by a universal 0.8 factor. The Committee has also not
enlightened us as to how the said factor had been applied while making
cosmetic changes in the rates. The Committee did not consider the
following glaring and untenable and incorrect conclusions of the 7‘h CPC
despite that the Staff Side pointed out it in their written
submissions.
(i) The house rent allowance is one such allowance which is not cost
indexed. As on 1.1.2016, the date on which the pay was revised, the DA
stood at 125%. What justification could be offered to reduce the rates
by 0.8%is inexplicable. By deferring the date of revised allowance by 18
months, i.e. with effect from 1.7.2017, the Government has enormously
gained financially. The actual financial outflow on account of the
revision of pay and allowances has thus become less than even what was
projected by the 7th CPC. The Committee should have known that on all
previous occasions, where the date of effect of pay and allowances had
differed, the Govt. had granted Interim Relief and merger of DA. No such
decision had been taken by the Government, prior to the setting up of
the 7th CPC. Even the precedence on which the committee wrongly relied
upon, had been set aside by the Board of Arbitration, not once but
twice.
(ii) The cosmetic changes effected in the rates of HRA which is
published to have benefited about 7.5 Iakhs employees is not correct but
exaggerated.
(iii) The Committee's decision to retain some of the department specific
allowances was on the suggestion made by the concerned heads of
departments. The Staff side view had not been considered at all.
(iv) The Pension committee’s recommendation to reject Option No. 1 on
the ground of infeasibility is further reflective of the attitude of the
Government towards the employees and pensioners.
On 30th June, 2016 the staff side had a meeting with the group of
Ministers headed by Shri Rajnath Singh, the Honourable Home Minister,
when an assurance was held out to revisit the computation of the Minimum
wage and multiplication factor. We were informed that the Committee
headed by you would consider as to how the assurance could be
implemented. Despite three rounds of meeting with you, nothing tangible
in this regard has happened. In our earlier submissions we had pointed
out with facts and figures as to how the 7'h CPC erred in their
computation of the Minimum wage and how could never be less than
Rs.26000 as on 1.1.2016. We are afraid that the repetition thereof would
not serve any purpose. However, as desired by you, we give hereunder
certain glaring, iniquitous and unjustified factors, the rectification
of which could be the least the Government could do while revisiting the
computation of Minimum wage and multiplication factor.
1. Dr. Aykhroyd formula does not speak of any averages. The commodity
prices of a particular date is to be taken into account for the
computation of minimum wage as on that date. Since the pay is cost
indexed, the fluctuation in prices of commodities in future is taken
care of by grant of dearness allowance. The 7th CPC took the average
prices of various commodities between 1.7.2014 to 30.6.2015 to compute
the minimum wage. This is clearly impermissible. If this error alone is
set right, the minimum wage shall work out at Rs. 19294 and the MF at
2.76 (See Annexure 1)
2. The 7th CPC reduced the housing component by 4.5%. This was in line
with the computation formula adopted by the 6tth CPC. Such reduction on
the specious plea that Central Government employees are given HRA
separately was ostensibly incorrect as the quantum of HRA provided for
is insufficient to meet the expenses incurred by an individual employee
for hiring an accommodation. The point however, we would like to
mention is that the 7th CPC did not notice that the 6th CPC had
increased / retained the rate of HRA whereas the 7th CPC for no valid
reason reduced all the three rates by a uniform factor of 0.8. The said
decision reduced the HRA in metro cities by 6% in classified cities by
4% and in unclassified towns by 2%. Averaging out to 4%. It must be in
the fitness of things, that the unwarranted reduction of housing
component is restored especially in the background of the Allowance
Committee refusing to restore the erstwhile rates. The computation of
the minimum wage if this correction is carried out would be as in
annexure 2. The minimum wage would then work out to Rs. 20232 and the
multiplication factor at 2.89. This is when the commodity price is taken
not as the average for 12 months but the actual price as on 1.7.2015.
3. The Honourable Supreme Court had directed that 25% must be added to
arrive at the actual minimum wage in order to enable the employees to
meet out various social obligations. Children education was on of the
minor components of the social obligations mentioned by Supreme Court.
When the Supreme Court delivered its verdict, education in the country
was in the public domain and was almost free up to the secondary level.
The advent of the neo liberal economic policies, imparting education to
the children has become one of the costly affairs. The reduction
effected by the 7th CPC to the extent of 10% attributable to children
education is totally unjustified and in our opinion even amounts to non
adherence to the supreme Court directive in the matter. If this error is
rectified, the Minimum wage would be Rs. 21873 (MF 3.12) , the
commodity prices being Rs. 9885 (actual as on 17,2015) and would be Rs.
Rs. 20391 if computation is done on the basis of the average of the
commodity prices as was done by the 7thCPC. The MF In the said two cases
would be 3.124 and 2.913 respectively. (See annexure 3 and 3A).
4. The 7th CPC has adopted the family at 3 Units. This is no doubt in
consonance with Dr. Aykhroyd formula. The family is taken consisting of
husband, wife and two children, value assigned being 1+,O.8,+O.6,+O.6.
In the present day society to assign a lower value for women is a
misplaced and outdated notion. The gender equality demands that the
family unit must be taken at 3.2. ( 1+1+0.6+0.6) Two workings are given
in Annexure 4 and 4A. In annexure 4 commodity price is what it should be
i.e. the actual prices as on 1.7.2015 and in annexure4 A the same is
what is taken by the 7th CPC. The minimum wage in Annexure 4 shall be
Rs. 19981 (MF2.94) and in the latter case the MW shall be Rs. 19193 and
the MF at 2.74) Please see annexure 4 and 4A for detailed working.
The 6th CPC while formulating the Pay band and Grade pay system had
applied varying multiplication factors to create the four pay bands.
They had relied upon the same argument that the skilled workers are
entitled to have better pay packets than the unskilled or semi skilled
labourers. The 7th CPC has advocated the same theory to apply varying
Multiplications factors for creating pay levels. The successive
application of different multiplication factors has disturbed the
vertical relativity and if this theory is perennially adopted in the
construction of pay scales the present equilibrium will be drastically
altered. The ratio between the minimum and maximum pay in Government
sector has been widening ever since the 5th CPC recommendations were
adopted. The 7th CPC has relied upon the private sector wage pattern for
justifying this practice. On quite a number of occasions, the previous
Pay Commissions had advocated against the wage determination in
Government and Public Sector on the basis of the fair wage comparison
with the private sector as the functions and assigned responsibilities
and objectives are essentially incomparable. Large scale
contractorisation and outsourcing have already come into stay in
Governmental organizations with consequent suppression of wages at the
levels of semi skilled and unskilled levels. We are not presently on the
ethical aspect of this unfair practice, which a welfare Government
ought not have indulged in. We are to state that by application of
different multiplication factors (i.e. Upto pay level 5 =2.57, pay level
6-9=2.62,Level 10-13A=2.67, Level 14-16 =2.72,Level 18:2.78 and level
17:2.81. By applying the multiplication factor at 2.81 for the Secretary
level officers, the 7th CPC tacitly admitted that the minimum wage
should not have been less than Rs. 19670. (i.e. 2.81 x 7000 = 19670)
In
this connection we would also like to bring to you notice that the
Government has now unilaterally altered the multiplication factor and
Pay matrix in respect of Level 13 from 2.57 to 2.67. Assigning a lower
multiplication factor to the officers of level 13 appears to be a
conscious decision of the 7th CPC as the Government’s executive order in
2008 to place the staid level of officers at a higher level had
disturbed the then existing vertical relativity in the Governmental
hierarchy. It is, therefore, the considered opinion and suggestion of
the staff side that the Government must come forward to apply the
uniform multiplication factor of 2.81 at all levels both for the
construction of the pay levels as also for the pay fixation in the new
Pay levels for the existing employees. If our suggestion is accepted,
the Minimum wage would be raised to Rs. 19670 with the multiplication
factor at 2.81.
We request you to kindly convene a meeting of the staff side to cause
discussions on the above submissions and arrive at a mutually acceptable
conclusion.
