7th Central Pay Commission report a big disappointment

The CPC has not taken some important issues into consideration, like wage revisions in other sectors like banks, insurance, some State governments etc., where the revision takes place once in every 5 years. For example, wage revision took place in the erstwhile AP State and a fitment benefit of 39% was given with effect from 01.7.08. Again in the divided States of AP &TS, a revision took place with effect from 17.7.2013 to benefit the employees to the tune of 43%. Therefore, in a span of 10 years, the increase in the wages is 82% by way of two wage revisions. These aspects were not taken into account while arriving at the fitment benefit of the Central government employees by the 7th CPC

The Central government is the biggest employer of the country with more than 35 lakhs of employees working with it, which is expected to be an ideal employer. It appoints pay commissions from time to time usually after a gap of 10-12 years to look into not only the pay, allowances and other monitory issues relating to the serving employees and pensioners but also the service conditions of the employees. This is being done since 1946 and till date 7 pay commissions have been appointed. The 7th Central Pay Commission (CPC) submitted its report to the Finance Minister on November 19.

The leaders and the employees of the Central government are expressing their strong resentment and fuming over the unscientific way of fixation of the Minimum Wage by the Seventh Pay Commission. As a matter of fact, the 5th CPC granted interim relief twice besides finally recommending 20% fitment. Of course, the Central government service associations, after negotiations with the government. achieved a fitment of 40%. Altogether, the benefit to the employees by virtue of 5th CPC was 60% of their basic pay.

The 6th CPC, on its own, recommended 40% fitment but actually the benefit to the employees worked out to be 50%-80% in the basic pay. Usually, while working out its recommendations, successive CPCs kept in mind the long gap between the pay revisions apart from reviewing the other issues. The CPCs should also keep in mind the inflationary trends and the resultant depreciated real value of the salaries of the employees.

The memorandum submitted by the JCM Staff Side to the 7th CPC has discussed many issues and the problems faced by the Staff. It collected prices of various commodities, from all the major cities, and requested the CPC to apply Dr Aykroid Formula while arriving at the minimum wage. The Staff Side worked out the Minimum Wage to 26,000 pm by applying the Formula, by collecting the prices of essential commodities from the market. With this, the multiplication factor to be applied to each employee’s basic pay comes to 3.7.

The 7th CPC has appreciated the scientific base of Dr Aykroid Formula, but while taking prices of the essential commodities from the market, it adopted an unrealistic approach. For example, the prices of rice and dal were taken as Rs 25.92 and Rs 97.84 respectively, while the actual market prices are more than Rs 48 and Rs 200 respectively. This unrealistic approach is only to recommend minimum wage at a lower stage. The CPC has decided the Minimum Wage to be only 18,000. To fix the minimum wage at much lower level, the CPC has taken the prices of the items covered by Dr Aykroid Formula at much below the market rates, resulting in the reduction of multiplication factor from 3.7 to 2.57.

Increase in the salaries of employees means the increase in basic pay, but not allowances like HRA, CCA, transport allowance etc. It is incorrect to take increase in these allowances into consideration while projecting pay revision benefit. Considering all these issues, the employees are totally dissatisfied and fuming over the recommendations. The CPC has not taken some important issues into consideration, like wage revisions in other sectors like banks, insurance, some State governments etc., where the revision takes place once in every 5 years.

For example, wage revision took place in the erstwhile AP State and a fitment benefit of 39% was given with effect from 01.7.08. Again in the divided States of AP &TS, a revision took place with effect from 17.7.2013 to benefit the employees to the tune of 43%. Therefore, in a span of 10 years, the increase in the wages is 82% by way of two wage revisions. These aspects were not taken into account while arriving at the fitment benefit of the Central government employees by the 7th CPC.

The Central government employees strongly believe that only with the intervention of the Central government this sort of unscientific recommendations was made by the 7th CPC. It is unfortunate, when the State governments, whose resources are limited, can afford to pay their employees 37% of their revenue expenditure, the Central government with its vast resources is not coming forward to give a reasonable fitment benefit once in 10 years.

As a matter of fact, the expenditure towards wages of the Central government employees comes to below 7% of the revenue expenditure. The employees hope that the Central government, which gives concessions in several ways to the corporate, business houses, capitalists of the country, should discuss with the associations and unions and decide the wage revision and other service conditions in a scientific manner and do justice to the several lakhs of employees and their families. (The writer is the General Secretary, Confederation of Central Government Employees and Workers, AP & TS)

By V Nageswara Rao