SECRETARY STAFF SIDE, NATIONAL COUNCIL (JCM) WRITES TO DEPARTMENT OF EXPENDITURE FOR REVISIT ON MINIMUM WAGE AND MULTIPLE FACTOR
From
Shiva Gopal Mishra
Secretary
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
To
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 change 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.
Thanking you,
Yours faithfully,
Shiv Gopal Mishra.
Secretary
Annexure-1
|
S.No.
|
Details
|
Amount
|
|
1
|
Commodity prices as on 1.7.2015
(actual)
|
9885.00
|
|
2
|
Misc: 20%
|
2471.00
|
|
3
|
|
12356.00
|
|
4
|
Social obligations: 15% as taken
by 7 cpc
|
2180.00
|
|
5
|
|
14536.00
|
|
6
|
Conversion of unskilled into semi
skill category.25%
|
3634.00
|
|
7
|
|
18170.00
|
|
8
|
Housing 3% as adopted by 7th CPC
|
562.00
|
|
9
|
|
18732.00
|
|
10
|
Updating to 1.1.20016 as per 7 CPC
formula 3%
|
562.00
|
|
11
|
Total: Minimum wage as on 1.1.2016
|
19294.00
|
|
12
|
Multiplication factor
|
2.76
|
Annexure 2.
|
S.No.
|
Details
|
Amount
|
|
1
|
Commodity prices as on 1.7.2015
(actual)
|
9885.00
|
|
2
|
Misc: 20%
|
2471.00
|
|
3
|
|
12356.00
|
|
4
|
Social obligations: 15% as taken
by 7 cpc
|
2180.00
|
|
5
|
|
14536.00
|
|
6
|
Conversion of unskilled into semi
skill category.25%
|
3634.00
|
|
7
|
|
18170.00
|
|
8
|
Housing 7.5% as per formula
|
1473.00
|
|
9
|
|
19643.00
|
|
10
|
Updating to 1.1.20p16 as per 7 CPC
formula 3%
|
589.00
|
|
11
|
Total: Minimum wage as on 1.1.2016
|
20232.00
|
|
12
|
Multiplication factor
|
2.89
|
Annexure 3.
|
S.No.
|
Details
|
Amount
|
|
1
|
Commodity prices as on 1.7.2015
(actual)
|
9885.00
|
|
2
|
Misc: 20%
|
2471.00
|
|
3
|
|
12356.00
|
|
4
|
Social obligations: 25% as per
formula
|
4119.00
|
|
5
|
|
16475.00
|
|
6
|
Conversion of unskilled into semi
skill category.25%
|
4119.00
|
|
7
|
|
20593.00
|
|
8
|
Housing 3% as per 7th CPC
|
638.00
|
|
9
|
|
21231.00
|
|
10
|
Updating to 1.1.20p16 as per 7 cpc
formula 3%
|
637.00
|
|
11
|
Total: Minimum wage as on 1.1.2016
|
21873.00
|
|
12
|
Multiplication factor
|
3.124
|
Annexure -3A
|
S.No.
|
Details
|
Amount
|
|
1
|
Commodity prices as taken by 7cpc
(average)
|
9218.00
|
|
2
|
Misc: 20%
|
2305.00
|
|
3
|
|
11523.00
|
|
4
|
Social obligations: 25% as per
formula
|
3841.00
|
|
5
|
|
15364.00
|
|
6
|
Conversion of unskilled into semi
skill category.25%
|
3841.00
|
|
7
|
|
19205.00
|
|
8
|
Housing 3% as per 7th CPC
|
593.00
|
|
9
|
|
19798.00
|
|
10
|
Updating to 1.1.2016 as per 7 cpc
formula 3%
|
593.00
|
|
11
|
Total: Minimum wage as on 1.1.2016
|
20391.00
|
|
12
|
Multiplication factor
|
2.913
|
Annexure 4
|
S.No.
|
Details
|
Amount
|
|
1
|
Commodity prices as on 1.7.2015
(actual)=9885.Converted into 3.2 family units
|
10544.00
|
|
2
|
Misc: 20%
|
2636.00
|
|
3
|
|
13180.00
|
|
4
|
Social obligations: 15% as per 7th
CPC
|
2326.00
|
|
5
|
|
15506.00
|
|
6
|
Conversion of unskilled into semi
skill category.25%
|
3876.00
|
|
7
|
|
19382.00
|
|
8
|
Housing 3% as per 7th CPC
|
599.00
|
|
9
|
|
19981.00
|
|
10
|
Updating to 1.1.2016 as per 7 cpc
formula 3%
|
599.00
|
|
11
|
Total: Minimum wage as on 1.1.2016
|
20580.00
|
|
12
|
Multiplication factor
|
2.94
|
Annexure -4A
|
S.No.
|
Details
|
Amount
|
|
1
|
Commodity prices as on 1.7.2015
(average as per 7cpc)=9218. Converted into 3.2 family units
|
9832
|
|
2
|
Misc: 20%
|
2459.00
|
|
3
|
|
12291
|
|
4
|
Social obligations: 15% as per 7th
CPC
|
2169
|
|
5
|
|
14460
|
|
6
|
Conversion of unskilled into semi
skill category.25%
|
3615
|
|
7
|
|
18075
|
|
8
|
Housing 3% as per 7th CPC
|
559.00
|
|
9
|
|
18634
|
|
10
|
Updating to 1.1.20p16 as per 7 cpc
formula 3%
|
559
|
|
11
|
Total: Minimum wage as on 1.1.2016
|
19193
|
|
12
|
Multiplication factor
|
2.74
|
