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Monday, December 7, 2015

Annexure II
01. DETERMINATION OF MINIMUM PAY – EXPLANATORY NOTE
To fix the minimum pay as low as possible; the Pay Commission revised the Akkroyed Formula and thus the 15th ILC norms itself as well as the directive of the Supreme Court. Similarly DA from 01.01.2016 assumed to be 6%, but added just 3% to estimate the cost. Following 3 para gives the details about the deviation of the 7 CPC to calculate the Minimum Pay as on 01.01.2016 as low as possible may be the after effect of the intervention of the Finance Minister and the Finance Secretary.

1.   The Pay Commission by their own unilateral way reduced the expenditure towards recreation, festival, etc to 15% from 25% which was an award of Supreme Court. The reason given for the reduction is that Child Education allowance

2.   Similarly the expenditure towards Housing has been reduced from 7.5% to 3% which was component of the Akkroyed Formula adopted in the 15th ILC Conference. While considering the exorbitant increase in the rate electricity charges and water charges has been increased after the new electricity policy adopted by the government of India as well as the state governments the expenditure on housing should be enhanced. 

3.   The Pay Commission by assuming an increase of DA @ 6% from01.01.2016 and the cost of living was estimated as on 1st July when the DA was 119%, the day which the commission recommended to implement the new pay, 6% DA considered, but we are not convinced why the cost was increased by just 3% when assumed DA increase is 6%. Hence I feel correction is inevitable here to be replacing 6% by 3%.

4.   The Pay Commission the “DA” assumed for 01.01.2016 at the rate of 3% has been added after adding the expenditure on fuel, electricity, etc., for festival, recreation, etc., provision for skills, for housing etc. Since this DA component is considering in lieu of the inflation and rise in Consumer Price Index the increased DA @ 6% should be calculated on the total cost after adding the items no 1 to 14. Thus 6% DA should be calculated on Total cost of Rs 9217.99 mentioned in the column of the Pay Commission Report.

Thus the above mentioned 4 deviations to be corrected to calculate the Minimum Pay and the following shall be the Annexure to Chapter 4.2 to derive the minimum pay as on 01.01.2016 after correction.


Items @ 
Per Day 
PCU 
(in gms) 
Per  Month 
3 CU
(in Kg) 
Price per KG as  per 
rates on  01.07.2013  (In Rupees) 
Total cost per  month (as on  01.07.2013)
 (In Rupees) 
1
Rice
475
42.75
25.93
1108.30
2
Dal Toor/Urad/ Moong 
80
7.2
97.84
704.44
3
Raw Vegetables 
100
9.00
58.48
526.28
4
Green Leaf Veg 
125
11.25
38.12
428.85
5
Other Veg Onion,
Potato,  Tomato 
75
6.75
32.80
221.42
6
Fruits
120
10.8
64.16
692.93
7
Milk (18 Ltrs) 
200 ml
18 ltrs
37.74
679.26
8
Sugar/Jaggery 
56
5.00
37.40
188.48
9
Edible Oil 
40 ml
3.6 ltr
114.02
410.46
10
Fish 

2.5Kg
268.38
670.95
11
Meat 

5.00Kg
400.90
2004.51
12
Egg 

90
4.27
383.98
13
Detergents etc, Bath &  washing soap, washing   powder etc., 


291.31
291.31
14
Clothing#
5.5mtrs 
per 
month 
5.5
  164.88
906.83
15
Total 
9217.99
16
Assume DA @ 6%as on 01.01.2016
553.08
17
        Step up of 6% on (23)as DA is projected at 125% on 01.01.2016
9771.07
18
Misc.*  Fuel, Electricity, Water Charges @ 20%
2442.77
19
  Total (15) divided by 0.8
12213.84
20
Marriage, Recreation, Festivals, etc 
4071.28
21
Total (17) divided by 0.75
16285.12
22
Provide for skill by adding 25% to (19)
4071.25
23
Sum (19+20)
20356.40
24
Housing @ 7.5%
1650.51
25
Final Minimum Pay as on 01.01.2016 (21) divided by .925
22006.92
26
Rounding off
22000.00

The Pay commission claimed that the prices of all items for finding Minimum Pay based in the Akkroyed formula have been sourced from Labour Bureau, Shimla. From the Annexure to Chapter 4.2 it can be see that the rate quoted was far less than that of the real rate.

The rate quoted by Labour Bureau is unbelievable and misguiding. For example, the rate oh whole Wheat at Ernakulam, Mundakkayam, Quilon, Talcher, Ghaziabad, Asansole, Durgapur, Haldia, Howrah, Jalpaiguri, Kolkatta, etcshown as Rs 5 to 10 where as other places of the country the rate was shown as Rs 15 to 35.  When the rate of Wheat Atta verified the rate at Tinsukia, Silchar, Jorhat, Tezpur, Himachal; Pradesh, Darjiling, Jalapiguri, Siliguri recorded as Rs 2 to 10. It is only the Labour Bureau or the Pay Commission can explain how the rate of Whole Wheat shall be higher than Wheat Atta at same location as there are processing charges of grinding, packing etc involved. This also recorded in places like Himachal Pradesh, Giridih, Ranchi, Bengaluru, Bhopal, Indore, Jabalpur, Nagpur, Hyderabad, Darjiling, Jalpaiguri Siliguri, etc. It has been gone such an extend make the system as mockery at Darjiling Whole wheat is costing Rs 13.55 and Wheat Atta cost Rs 2.11 and in Jalapiguri it is 10.59 and Rs 3.01 and at Siliguri Whole wheat costs Rs 13.05 and for Atta just Rs5.08.

Similarly in the chart available in the website of Labour Bureau the rate of Udid Dal, Coconut oil, Sunflower oil, vegetable, etc was not available. It was not mentioned in the Report that from where these rate has been taken.  Similarly in the Akkroyed formula the rate of Sugar and Jaggery to be taken together, where as the rate of Sugar only considered and not the rate of Jaggery has been taken.

Minimum Pay based on various other available facts & Figures:

The Andhra Pradesh Government has been constituted a Pay Revision Commission and its report came in the year 2014. The minimum basic pay has been calculated based on the Akhroyyed formula. Considering the cost of items recorded the Andhra Commission total cost will be Rs 9830.58 in the column 15.  
By considering the retail rates of items mentioned in the Dr. Akhroyed formula available in the Government own sight of Agricultural informative Division, National Informatics Centre, Ministry of Communication & Information Technology, the cost shall be more than Rs 11,000 and after adding the expenses for housing, recreation, skill, electricity , etc added, the minimum pay will be about Rs24,000/-.

Similarly the Kerala Government constituted Pay Revision Commission for State Government Employees of Kerala Government. The Commission recommended Minimum Pay as RS 17500/- from 01.07.2014. If considering that as minimum pay as on 01.07.2014 and adding 3 DA @ 6% each the Minimum Pay shall be more than Rs. 20000/-

          Considering the above mentioned three factors illustrated below what would be the Minimum Pay for Central Government Employees from 01.01.2016:

A.   Minimum Pay based on the Pay Commission, Andhra Pradesh:

More over during the period of 2014 the Pay and Allowances of Andhra State Government was revised based on the report submitted by Shri. P.K. Agarwal, Pay Commissioner. In the said report also the Pay Commission for Andhra adopted the 15th ILC norms and Akkroyed formula for determine the minimum pay.

In the para 05.15, Page 26, Vol. I, Pay Revision Commission, Andhra Pradesh 2014 it was illustrated that the total expenditure on items prescribed by the Akkroyed formula is Rs 9830.58. The rate was taken of the year 2013 July. The chart is reproduced below:

Need based Minimum Wage

Items @ 
Per Day 
PCU 
(in gms) 
Per  Month 
3 CU (in Kg) 
Price per KG as  per 
rates on  01.07.2013  (In Rupees) 
Total cost per  month (as on  01.07.2013)
 (In Rupees) 
Rice
475
42.75
34.99
1495.82
Dal Toor/Urad/ Moong 
80
7.2
73.99
532.73
Raw Vegetables 
100
9.00
34.39
309.51
Green Leaf Veg 
125
11.25
32.20
362.25
Other Veg Onion,
Potato,  Tomato 
75
6.75
24.75
167.06
Fruits
120
10.8
71.38
770.90
Milk (18 Ltrs) 
200 ml
18 ltrs
37.44
673.92
Sugar/Jaggery 
56
5.00
41.66
208.30
Edible Oil 
40 ml
3.6 ltr
138.67
499.21
Fish 

2.5Kg
272.86
682.15
Meat 

5.00Kg
395.55
1977.75
Egg 

90
3.67 per piece
330.30
Detergents etc, Bath & 
washing soap, washing  
powder etc., 


329.25
329.25
Clothing#
5.5mtrs 
per 
month 
5.5
  271.17 Per Mt.
1491.43



Total 
9830.58

The total expenses as per Andhra commission as on 01.07.2013 is Rs9830.58/- If replace the cost in 7th CPC Rs.9217.99 by Rs9830.58 the minimum pay further increase.

The column 15 to 26 in annexure to Chapter 4.2 is re written based on the total cost as Rs 9830.58 in place of Rs 9217. 99 the Minimum Pay shall be Rs 23500/-. Illustration given below:

15
Total 
9830.58
16
        Step up of 6% on (23)as DA is projected at 125% on 01.01.2016
589.84
17
Total Cost
10420.41
18
Misc.*  Fuel, Electricity, Water Charges @ 20%
2605.10
19
  Total (15) divided by 0.8
13025.51
20
Marriage, Recreation, Festivals, etc 
4341.84
21
Total (17) divided by 0.75
17367.35
22
Provide for skill by adding 25% to (19)
4341.84
23
Sum (19+20)
21709.19
24
Housing @ 7.5%
1760.20
25
Final Minimum Pay as on 01.01.2016  (21) divided by .925
23469.39
26
Rounding off
23500.00

If the 29% DA given to the Central Government employees from 1st January 2014 to 1st July 2015 added with the cost of items on 01.07.2013 calculated by Andhra Commission the cost 9830.58 will become Rs 12681.45. Thus the Minimum Pay may further increase.

It should be noted that in Andhra Pradesh rice is producing highest and always buffer stocks available in Andhra and exporting to all other states and naturally the rate of rice shall be the lowest. Even then Andhra recorded the rate for rice in 2013 as 34.99 where as 7 CPC found the rate of rice a meagre Rs25.93.

The rate of edible oil, detergents, clothes etc are fixed across the state as it is selling on MRP printed on each item. Hence there is no possibility for varying state by state. Even then the expenses on these items are higher in 2013 than of 2015

B.   Minimum Pay based on the Retail Rate published by Ministry of Communication & Information Technology, Government of India:

The Government every month publishing the rate of all eatable items, such, rice, wheat, dal, sugar, fruits, vegetables, milk, edible oil, fish, meat Mutton, egg, etc. through the Retail Price Information System. The said site is owned by Agricultural informative Division, National Informatics Centre, Ministry of Communication & Information Technology.

 The rate for 01.011.12015 is taken from the said source through internet Source: http://rpms.dacnet.nic.in/Bulletin.aspx. Then worked out the minimum wage. It comes as below:

Minimum Wage as per Government Prices as on 1/11/2015

Sl. No
Items @ 
Per Day 
PCU 
(in gms) 
Per  Month 
3 CU (in Kg) 
Price per KG as  per 
rates on  01.07.2013  (In Rupees) 
Total cost per  month (as on  01.07.2013)
 (In Rupees) 
1
Rice and wheat
475
42.75
44.25
1891.69
2
Dal Toor/Urad/ Moong 
80
7.2
151.87
1093.46
3
Raw Vegetables 
100
9.00
30.47
274.23
4
Green Leaf Veg 
125
11.25
40.00
450.00
5
Other Veg Onion,
Potato,  Tomato 
75
6.75
40.00
270.00
6
Fruits
120
10.8
68.87
743.80
7
Milk (18 Ltrs) 
200 ml
18 ltrs
38.16
686.88
8
Sugar/Jaggery 
56
5.00
31.75
158.75
9
Edible Oil 
40 ml
3.6 ltr
136.71
492.16
10
Fish 

2.5Kg
433.81
1084.53
11
Meat 

5.00Kg
447.18
2235. 90
12
Egg 

90
4.89 per piece
440.10
13
Detergents etc, Bath & 
washing soap, washing  
powder etc., 


320
320.
14
Clothing#
5.5mtrs 
per 
month 
5.5
  240 Per Mt.
1320.00
15



Total 
11461.48

The total in the Chart at column number 15 has been replaced and calculated to find the Minimum Pay. Thus the Minimum pay is Rs. 27,000/-. The illustration is given below:

15
Total 
11461.48
16
Step up of 6% on (23)as DA is projected at 125% on 01.01.2016
687.89
17
Total cost
12149.17
18
Misc.*  Fuel, Electricity, Water Charges @ 20%
3037.29
19
  Total (15) divided by 0.8
15186.46
20
Marriage, Recreation, Festivals, etc 25% 
5062.15
21
Total (17) divided by 0.75
20248.61
22
Provide for skill by adding 25% to (19)
5062.15
23
Sum (19+20)
25310.13
24
Housing @ 7.5%
2052.17
25
Final Minimum Pay as on 01.01.2016 (21) divided by .925
27362.30
26
Rounding off
27000.00

For the above calculation the rate has been taken as 01.11.2015. The rate for any period as mentioned Pay Commission is available in the NIC source and can be work out the minimum pay.

C.   Minimum Pay based on the Pay Revision Commission, Kerala:

10th Pay Revision Commission, Kerala was appointed by Government of Kerala on 30.11.2013 under the Chairmanship of Justice C.N. Ramachandran Nair, Retired Acting Chief Justice of Kerala High Court. The Pay Revision Commission submitted its partial report of Pay revision during teh month of June 2015. It recommended Rs17000/- as Minimum Pay as on 01.07.2014 for the Employees working under Kerala Government.

The pay shall be increase to Rs 20200/- as on 01.01.2016 by adding three DA @ 6% on 01.01.2015, 01.07. 2015 and 01.01.2016 respectively.   

 From the above explanations and illustrations on various aspects, it can be seen that the 7 CPC totally deviated from the concept of the 15th ILC, Dr. Akkroyed Formula and compromised with false figures and facts to arrive their magic figure of Rs 18000 as minimum pay to please their political bosses in the government.

Thus a complete revisit in the calculation being done by 7 CPC has to done to derive the Minimum Pay for Central Government Employees.

02. RATIONALISATION OF PAY STRUCTURE – PARA 5.1.19
Though it is irrational to maintain different Index at different rates Level 6 onwards higher index rate is granted.  (Para5.1.19)

Justification for ‘index of rationalisation’ states that, “the role, responsibility and accountability increases at each step in the hierarchy”.  

The concept is not practically achieved.  The Pay of the senior employees in the same Grade/Level will be revised with the Fitment formula of 2.57; whereas the new recruits/promotions from much lower grade will get the benefit of fitment of 2.57 and above. If the Pay Commission indent to justify the index of rationalization the multiple factor at the entry pay of each level should be reflected in each stage. Especially most of the pays in PB2 and PB 3 are promotional grades for the employees those who recruited in PB1 will reach at higher stage in those levels when they got promotion and they will not get the benefit the “index of rationalization”. Hence the senior employees are neglected visa vis the new entrants.


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