Wednesday, February 10, 2016

Charter of demands and run up to indefinite strike decided by NJCA

National Joint Council of Action
4, State Entry Road, New Delhi – 110055

No.NJC/2015/7th CPC

February 9, 2016

All Constituents of NJCA
Dear Comrade

The NJCA met on 08.02.2016 as scheduled. The meeting after taking into account various factors decided that the proposed indefinite strike will commence from 11.04.2016 if no settlement is brought about on the charter of demands by that time. The meeting also took the following decisions.

1. Strike notice will be served by the NJCA and all its constituents on 11.03.2016 by holding massive demonstration.

2. There will be a massive Rally on 11.03.2016 at Delhi and leaders of NJCA will make it possible to attend the said rally and the strike notice will be served on Cabinet Secretary, Government of India.

3. All the National JCA leaders will attend Rally at the State Capitals/big industrial centres during the month March and April, 2016. Dates will be finalised in consultation with the concerned State JCA.

4. To strengthen the campaign, the NJCA will place on the website a pamphlet explaining the demands.

5. Posters will be centrally designed and kept in the website for State JCAs and constituents to adopt.

6. All Constituents will undertake independent campaign programmes in the month of March 2016 to popularize the demands.

7. 29th March will be observed as solidarity day throughout the country unitedly by all the Constituents of NJCA.

8. The indefinite strike will commence at 6 am on 11.04.2016.

9. The updated Charter of Demands on which the indefinite strike is to be organized is enclosed.

10. The Constituent organizations may add sectional demands as Part B of the Charter of Demands of the NJCA
The National JCA appeals all constituents to make intensive campaigns to make the strike an unprecedented success.

With greetings,
Yours fraternally,
(Shiva Gopal Mishra)

Charter of Demands

1. Settle the issues raised by the NJCA on the recommendations of the 7 CPC sent to Cabinet Secretary vide letter dated 10th December 2015

2. Remove the injustice done in the assignment of pay scales to technical/safety categories etc. in Railways& Defence, different categories in other Central Govt establishments by the 7 CPC

3. Scrap the PFRDA Act and NPS and grant Pension/family Pension to all CG employees under CCS (Pension) Rules, 1972 & Railways Pension Rules, 1993

4. i) No privatization, /outsourcing/contractorisation of governmental functions

ii) Treat GDS as Civil Servants and extend proportional benefit on pension and allowances to the GDS

5. No FDI in Railways & Defence; No corporatization of Defence Production Units and Postal Department.

6. Fill up all vacant posts in the government departments, lift the ban on creation of posts; Regularise the casual/contract workers

7. Remove ceiling on compassionate ground appointments

8. Extend the benefit of Bonus Act,1965 amendment on enhancement of payment ceiling to the adhoc Bonus/PLB of Central Government employees with effect from the Financial year 2014-15

9. Ensure Five promotions in the service career of an employee

10. Do not amend Labour Laws in the name of Labour Reforms which will take away the existing benefits to the workers

11. Revive JCM functioning at all levels

Cabinet Secretary,
Government of India &
National Council/JCM

Dear Sir

Subject: 7th CPC recommendations – Reg.

          We have written under the cover of the NJCA’s letter in No JJCA/2015/7th CPC dated 11th December 2015 our comprehensive suggestions for effecting changes in the recommendations of the 7th CPC. This was also subjected to discussion with the JS (A) of DOPT on 11.12.2015 in response to the letter in No 3/1/2015-JCA dated 10-12-2015.
We request that the same may be treated as the consensus view of the Staff Side, JCM/National Council.

Thanking you,

Source: http://ncjcmstaffside.com/2016/charter-of-demands-and-run-up-to-indefinite-strike-decided-by-njca/

Tuesday, February 9, 2016

Shri Suresh Prabhu, launched Personalised take away bedrolls service in Indian Railways

Shri Suresh Prabhakar Prabhu, Union Minister of Railways during a grand function held at East Tambaram Railway Colony Ground in Tambaram, Chennai yesterday i.e.  07.02.2016 (Sunday) launched various Railways project/schemes which also included ‘Personalised take away bedrolls scheme’
            Initially, the supply would be at Chennai Central Railway Station and Thiruvananthapuram Central Railway Station of Southern Railway. Later, this scheme will be extended to other stations also in the country in phases .

Salient features of e-Bedrolls:
        Bedrolls are disposable.  Hence, passengers can take them home after journey.

         Type 1 – Bedroll kit packed in a non-woven fabric bag consisting of two cotton bedsheets and one pillow at a cost of Rs.140.

         Type 2 – Blanket kit packed in a non-woven bag consisting of one blanket at a cost of Rs.110.

        Cost is inclusive of all taxes and uniform across stations over Indian Railways.

         Any passenger having a valid confirmed ticket for travel from Chennai Central railway station or Thiruvananthapuram Central railway station can book the bedroll kit – either type 1 or type 2 or both together.

         Booking available at www.irctctourism.com under the tab Bedrolls.

         Bedrolls can also be purchased across the designated counter at the stations by paying cash.

        Website asks for PNR number, validates the same and shows information on availability, cost etc.

        Passenger can book the required bedroll kits and pay through credit / debit / pre-charged cards.

        Booking will be confirmed at the website and also through e-mail and SMS.

         Bank charges for the transaction to be borne by the customer.

         Bedrolls service available between 06.00 hrs. to 22.00 hrs.

         In case of trains running late and reaching the designated station between 22.00 hrs. to 06.00 hrs., bedrolls will not be delivered and treated as non-delivery by IRCTC.

         In case of non-delivery by IRCTC, 100% charges for the service would be refunded to the pasenger’s account. (Refund will not include bank charges for booking transaction).

         Advance reservation period – from 60 days before day of travel to up to five hours before scheduled departure of train.

        A toll free number – 1323 – will give information about the kits, cost and availability.

 Cancellation / Amendment:
         Cancellation / Amendment of orders through www.irctctourism.com with the registered ID.

        Refund amount will be credited to the card account through which the original booking was made.

        Cancellation / amendment before five hours of scheduled departure will incur cancellation charge of 20%.

         Cancellation / Amendment within five hours of scheduled departure – no refund.

         Passengers not permitted to resell the bedrolls after use.

        Queries and feedback – 1323 toll free (information); 011-2334 5300 (round the clock) and ebedroll@irctc.com



Meeting of the National Joint Council of Action (Railways, Defence, Postal, Confederation) held on 08th February 2016 unanimously decided to serve indefinite strike notice on 11th March 2016 and to commence indefinite strike from 11th April 2016.

Further details will follow.

Secretary General
Confederation of
Central Govt. Employees & Workers

Source: http://confederationhq.blogspot.in/2016/02/flash-flash-flash-njca-decided.html

Monday, February 8, 2016




Please read the following minutes of the Implementation cell of the Finance Ministry which is acting as the Secretariate of the Empowered Committee constituted by the Government under the Chairmanship of Cabinet Secretary for processing of 7th CPC recommendations for submission to the cabinet for approval. Please ensure (1) that your department has nominated a nodal officer and try to interact with him (2) that your organization has submitted a memorandum or letter to your departmental head seeking modifications to the department-specific recommendations of the 7th CPC (3) that your departmental head held consultations with your organization on the department specific modifications submitted by you, before finalizing the proposals for submission to the Implementation cell (4) that proposal as per the demand of your organsiation for modifying the proposal of 7th CPC is submitted to the Implementation cell within two weeks (i.e before 16.02.2016) by your department.

Please note that this is the only stage when the Unions/Associations/Federations in each department shall get an opportunity to present their demand for modifications on department – specific recommendations of the 7th CPC. If we fail to Intervene effectively at this state, we may not get another chance to present our case before the Government.

Regarding common demands JCM (NC) Staff side had already submitted its memorandum to Cabinet Secretary and two stages agitational programmes are organised and is preparing for indefinite strike. Regarding Department-specific issues Confederation National Secretariat held last month had given a clear direction to all affiliated organizations to organize departmental level agitational programmes by each organsations (if possible jointly with other organizations in that department) on department- specific modifications submitted to each Departmental head. Unless we build up pressure by organizing struggle the departmental heads may not consider our demand for modification seriously and may not even submit any proposal for modifications to the Implementation cell.

Please note the following decisions of the Implementation cell.

(1)   Nodal officers to take net of any representation or demand of the staff side Association under the administrative purview of their Department. Nodal officers to ascertain the views/comments of the concerned office in the light of the representation/demands raised by the staff Association.

(2)   In case, there is any need for consultation with the staff Association at the level of the Department, the same may be done as per the assessment of the Department.

(3)   In case, the Department is of the view that any recommendation which are specifically related to their Department, need any modification, adequate justification in clear-cut terms should be brought out while sending the comments to the implementation cell

(4)   In case of any modification, the extra financial implication (per annum) over the recommendations of the commission should be clearly indicated.

(5)   If any modification is suggested approval of the Minster (of the concerned department should be obtained.

All the above formalities are to be completed within two weeks and proposal should be submitted to the implementation cell within two weeks i.e., before 16.02.2016.

(M. Krishnan)
Secretary General


Click here to view the minutes of the meeting


Saturday, February 6, 2016

7th Central Pay Commission: Ministries can raise afresh salary hike demand

New Delhi: Ministries and departments can raise afresh the demand for pay revision if they find that some of the justified suggestions made by the staff associations were not accepted by the 7th Central Pay Commission.

Such demands could be submitted to the Implementation Cell (IC), created in the Finance Ministry, to work as Secretariat for the Empowered Committee of Secretaries headed by Cabinet Secretary P K Sinha.

The CoS will screen the recommendations of the Commission and firm up the conclusions for approval of the Cabinet.

"If a representation was made by a Staff Association before the 7th Central Pay Commission and the Commission after due diligence has not accepted the demand made there in, the same matter normally not be considered at the stage.

"However, if departments consider that the issues are of such nature that they require consideration at this stage also, then they may give their comments with full justifications to the IC," said the minutes of the of first meeting of the IC.

While a number of ministries/departments have sent their comments and nominated their Nodal Officers, the comments received from some ministries are "simply in the nature of forwarding" the representations of the staff associations without their comments.

The recommendations when implemented would have bearing on remuneration of 47 lakh central government employees and 52 lakh pensioners.

Subject to acceptance by the government, the recommendations will take effect from January 1, 2016.

Minutes of the meeting, held on February 2, also said it was also impressed upon the Nodal Officers of ministries and departments that "in case, there is any need" consultation with the Staff Association at the level of department, "the same may be done as per the assessment of the department".

Further, if a department is of the view that any recommendation needs modification, adequate justification should be brought out while sending the comments to the IC.

The meeting was held to formulate the action points on processing of Commission.


Budget 2016: Government to allocate Rs 1.10 lakh crore for 7th Pay Commission, OROP: Arun Jaitley

Budget for the next fiscal needs to provide Rs 1.10 lakh crore for implementing the One Rank One Pension (OROP) Scheme and 7th Pay Commission award (AFP)

"During the financial year 2016-17, the central government has to make provision for about Rs 1.10 lakh crore in order to meet the liabilities on account of implementation of 7th Pay Commission recommendations and OROP Scheme," Jaitley said.

Budget for the next fiscal needs to provide Rs 1.10 lakh crore for implementing the One Rank One Pension (OROP) Scheme and 7th Pay Commission award, besides a higher allocation for the farm sector, Finance Minister Arun Jaitley said on Friday.

Addressing the Consultative Committee attached to the Finance Ministry, he also said that India has potential to grow at a much faster pace even as he exuded confidence that fiscal deficit target for current financial year will be within target.

"During the financial year 2016-17, the central government has to make provision for about Rs 1.10 lakh crore in order to meet the liabilities on account of implementation of 7th Pay Commission recommendations and OROP Scheme," Jaitley said.


Govt issues details of OROP scheme; to cost 7500 crores annually at current rate
He also said that the agriculture growth in the last two years has suffered mainly due to insufficient monsoons and highest ever amount was given to the states for drought relief during the current financial year, 2015-16.

"More incentives will be given to agriculture sector for increasing agriculture production and productivity," he said.

7th Pay Commission recommendations will not upset fiscal roadmap: Raghuram Rajan
India, he said, continues to be one of the fastest growing economies in the world, but there is still potential to grow at a much faster pace.

"The world economy is passing through an uncertain and fragile situation... The silver lining is low international commodities and oil prices which in turn has helped in better macro-economic situation of the country," Jaitley said.

The 7th Pay Commission in November recommended increase in remuneration of about one crore government employees and pensioners which is estimated to impose an additional burden of Rs 1.02 lakh crore in 2016-17.

The new pay scales, subject to acceptance by government, will come into effect from January 1, 2016.

The government had last year announced that it will implement OROP under which a uniform pension would be given to armed forces personnel retiring at the same rank with the same length of service. The scheme would be implemented from July 1, 2014.

Read more at  http://www.dnaindia.com/money/report-budget-2016-government-to-allocate-rs-110-lakh-crore-for-7th-pay-commission-orop-arun-jaitley-2174388



A meeting of all the Nodal Officers Of various Ministries/DepartmentS, who have been appointed to interact with the Implementation Cell in connection with the processing of the recommendations of the Central Pay Commission, was held on 02.02.2016. Joint Secretary (IC), Department of Expenditure, presided over the meeting

2. While explaining the background and the context in which the meeting of Nodal Officers was held, it was brought Out in the meeting that after the receipt of the report Of the 7th Central Pay Commission on 19.11.2015, Ministry of Finance initiated a proposal to setup an appropriate mechanism to process the recommendations Of the Commission. With the approval Of the Cabinet. an Empowered Committee Of Secretaries (E-COS) headed by the Cabinet Secretary has been set up on 27.1.2016 to screen the recommendations and to firm up the conclusions for approval Of the Cabinet. An Implementation Cell (IC), as a dedicated and focused wing in the Department Of Expenditure (DOE) has been created to work as the Secretariat for the E-CoS.

3. AS the recommendations Of the Commission relate to various Ministries/ Departments, their views/comments would be essential to process the matter for submitting the same before the E-CoS. JS(Pers), D/o Expenditure wrote a D.O. letter to the Secretaries Of various Departments on 21.11.2015, wherein all the Departments were requested to formulate their views/comments on the recommendations of the Commission pertaining to them after taking into account the representations of the Staff Associations and also to nominate a Joint Secretary level Nodal Officer for interaction with the Implementation Cell. While a number Of Ministries/Departments have sent their comments and nominated their Nodal Officers, the comments received from some Ministries are simply in the nature of forwarding the representations of the Staff Associations without their comments.

4.In the above background, JS(IC) explained that there was a need for all the Ministries/Departments to furnish their comments in a structured format so that their collation and analysis could be placed before E-COS in a systemic manner. Accordingly, JS(IC) impressed upon the following action points to be acted upon by the Nodal Officers to enable an expeditious processing of the recommendations of the 7th Central Pay Commission:

(i) Departments who have not yet nominated a Nodal Officer, should do it within the next 2 days.

(ii) To be ensured that Nodal Officers are not changed midway, unless extremely unavoidable.

(iii) Nodal Officers may get acquainted with the recommendations of the Commission as specifically applicable to their Departments. Nodal Officers to find out which Wing/Office (attached or subordinate or UT) is concerned with the recommendations of the Commission. The mechanism of Nodal Officers should also be put in place in attached/ subordinate/lJTs so that the comments of such offices could be properly coordinated at the level Of the Department concerned without any further delay.

iv) The comments Of the attached/subordinate offices/UTs should be compiled by Nodal Officers at the Department level itself.

(v) Nodal Officers to take note of any representation or demand Of the Staff Association under the administrative purview Of their Department, Nodal Officers to ascertain the views/comments of the concerned Office on the recommendation Of the Commission in the light Of the representation /demands raised by the Staff Association.

(vi) In case, there is any need for consultation with the Staff Association at the level Of the Department, the same may be done as per the assessment Of the Department.

(vii) Thereafter, the formal views/comments of the Department should be sent to the Implementation Cell (IC) on the recommendations of the and directly related to that Commission, which are specifically Department.

(viii) In case, the Department is of the view that any recommendation which are specifically related to their Department. need any modification, adequate justification in clear-cut terms should be brought out while sending the comments to the Implementation Cell (IC),

(ix) In case of any modification, the extra financial implications (per annum) over the recommendation Of the Commission should be Clearly indicated.

(x) If no modification Of the recommendations Of the Commission is suggested, approval Of the Secretary of the Department should be Obtained before sending the recommendations to the Implementation Ceil (IC). If, however, any modification is suggested, approval of the Minister should be obtained.

(xi) While the views/comments of the Departments on the recommendations Of the Commission directly and specifically applicable to that Department are mandatory. a Department is free to offer views/comments on the recommendations which are Of general nature or concerning other Departments.

(xii) Besides sending the comments/views of the Department in the running format, the same should also be sent to the Implementation Cell (IC)in the ‘prescribed proforma’ within two weeks. The soft copies of the same should also be sent through email. The email id of JS(IC) is : jsic- cpc@nic. in

(xiii) Nodal Officers shoud regularly keep a watch on the website Of the Finance Ministry at the link http://www.finmin.nic.in/the ministry/dept expenditure/notification/7cpc/index.asp. E-mails Should also be checked regularly for the purpose. The updates/further action to be taken shall be posted there to facilitate quick action.

5. Apart from the above action points, it was also felt that sub-groups may be formed after the receipt of comments from the Ministries/Departments to accord focused consideration to certain specific issues, if necessary.

6. Besides above. after detailed deliberations, the Nodal Officers also agreed to the following ‘

(i) Even if the Department has no comments, it should send a response, saying that it has ‘Nil Report’.

(ii) While certain Departments have already given their comments, these comments would be sent again in the ‘prescribed format’ and in accordance with the points brought out in para 4 above.

(iii) Nodal officers would ensure that the comments of their Departments on all the recommendations Of the Commission and also on the representations received so far from the Staff Associations are forwarded to Implementation Cell (IC) in the prescribed format in a consolidated fashion and not in piece-meal within next two weeks.

(iv) If a representation was made by a Staff Association before the 7th Central pay Commission and the Commission after due diligence has not accepted the demand made therein, the same matter should normally not be considered at this stage. However, if Departments consider that the issues are of such nature that they require consideration at this stage also, then they may give their comments with full justifications to the Implementation Cell (IC).

7. With the above discussions, the meeting ended with a vote of thanks to the Chair.


Incentive Scheme for the employees of Ordnance factories-BPMS



CENTRAL OFFICE: 2-A, NAVEEN MARKET, KANPUR – 208001, PH & FAX : (0512) 2332222
MOBILE: 0915733686, 09235729390, 09335621629,

WEB : www.bpms.org.in


Dated: 02.02.2016


Shri S C Bajpai,
Avadi, Chennai.

Subject: Incentive Scheme for the employees of Ordnance factories.

Respected Sir,

With due regards, it is submitted that all the 03 recognized federations have already reflected their views and recommended to extend the existing incentive scheme (incentive bonus) for examiners deputed for quality control at par with the maintenance workers in Ord & Ord Equipment Factories.

It is learnt that all the Ord & Ord Equipment Factories have also submitted the necessary inputs to the OFB in response to OFB letter No.754/PER/POLICY(PT), Dated 23.11.2015, 02.12.2015 & 17.12.2015 on the subject matter. Since then, the beneficiaries (examiners) are eagerly waiting for the compliance of the recommendations.

In such circumstances, you are requested to take appropriate action expeditiously so that the examiners may get the incentive bonus at par with the maintenance workers without further delay.

Thanking you.

Sincerely yours
Secretary/BPMS &
Member, JCM-II Level Council (MOD

Thursday, February 4, 2016

‘Seventh Pay Commission award can be staggered, made more generous’

National Institute of Public Finance and Policy Director and Member of the Seventh Pay Commission Rathin Roy spoke to The Hindu on his proposal of deferred implementation of its award to Central government employees and pensioners. Edited Excerpts:

Should there be a further pause on fiscal consolidation?

Absolutely not. For three reasons: First the FRBM [Fiscal Responsibility and Budget Management] target has been relaxed far too many times in India’s recent history. . Second, the ostensible reason for reducing the FRBM target, mainly to increase public investment, does not hold. Over 70% of the fiscal deficit is devoted to borrowing for consumption in the form of the revenue deficit. If you want to raise investment, you should do so by borrowing less to consume Three, even if the government wants to implement the [Seventh] Pay Commission award and modestly increase public investment, there is a pathway to do so, which I can see and so presumably can the Ministry of Finance.

What is this pathway for implementing the Seventh Pay Commission award to Central government employees and pensioners?

The Pay Commission award would result in a net impact on the Government of India Budget of approximately 0.5 % of GDP because the nominal GDP is lower this year than I calculated in the Pay Commission report. It is possible to contemplate implementing the basic pay plus DA [dearness allowance] merger in the current year and deferring implementing any real increases in pay and pensions to the future. This could be done by compensating those who would have to bear the burden of the deference by giving them a more generous award distributed over several years. I think what they should get, from April 1, 2016, is what they would get if we merge the basic pay and the DA, which is more or less what they are already getting. That will mean some increase in allowances but other than House Rent Allowance [HRA] the burden of that [on the government budget] will not be very high. The second thing we can do is defer allowances, principally the HRA. The case for that is strong because we are in the midst of fairly flat growth in consumption expenditure and rents are not going up much. The third thing we could do is to contemplate raising the service tax. Of course, the revenue generated will have to be shared with the States but when the GST [Goods & Services tax] comes in, the service tax rate will any way be approximately be 18%. Today it is 14%. So, a 2 percentage point increase in service tax is also a feasible option.

Could you explain your Pay Commission award implementation pathway proposal with an example?

My salary is Rs. 80,000 per month (basic) and with DA it comes to approximately Rs. 1,70,000. With the implementation of the Pay Commission award, that would go up to Rs. 2,30,000 a month. I am saying that the increment of Rs. 60,000 a month need not all be given at one go. It can be staggered and made more generous. So this could be done for pay and for pension. Now I am not competent to say whether this is politically feasible or not. But certainly it is an option.

Now on increasing public investment…

If you want to increase public investment, one option is to borrow less to consume, to reduce the revenue deficit. A 0.2% point reduction in the revenue deficit, say by reducing subsidies, can transfer to a 0.2 % point increase in public investment. That improves the quality of the fiscal deficit. If you cannot reduce the revenue deficit, you can reshuffle the portfolio of public sector assets. You can sell public assets that currently exist on the government books to the value of 0.2% of GDP. Here, you are selling public assets to create fresh public assets.

You are advocating disinvestment, which the government has not shown much political appetite for especially strategic sales and privatisation…

I can think of several reasonably profitable public enterprises which perform no public functions. Have you ever heard of a company called Balmer Lawrie? It’s a government travel agency. I would urge that the government identify assets like this which have no perceptible impact on either public welfare or on the ability of the government to steer the economy in the direction it wants and sell them.

Other options?

Given both the debt and fiscal deficit numbers of the States and Centre taken as a whole are healthy then it just might well be worth considering allowing States to increase public investment rather than the Centre. We could think of relaxing the states FRBM targets which can then increase public investment because the States together are not borrowing to consume [unlike the Centre]. The States together are running either a zero or very small revenue deficits. Allowing them to increase their fiscal deficits for the purpose of public investment will be far more virtuous in terms of the quality of the fiscal deficit than allowing the Centre to do it with its high level of revenue deficit. The point is that the agency to do it consistently with the minimum loss of the quality of fiscal rectitude today happens to be the states, not all, but taken collectively.

Growth depends on the combination of fiscal and monetary policy. The Reserve Bank’s Governor doesn’t appear open to reviewing the inflation target…

Setting the inflation target is not a technical exercise anywhere in the world. What the inflation target should be is not a call of the Governor, though his opinion is very important, it is ultimately the call of the government of the day and therefore of the Prime Minister and the Minister of Finance. We have an inflation target of 4%-5% and it is delivering to us a repo rate which is translating to an average lending rate of 11-12% whereas the nominal GDP growth is 7.75%. Think of the economy as a business. You are asking me to borrow money at 12% and the return I get from that borrowing is 7.75%. It doesn’t make good business sense. So something has to give. Either we reduce the cost of capital or we raise the nominal growth rate. The real rate of growth is only 50 basis points lower than forecast by the government But the nominal rate of growth has collapsed from around 13% just ten months ago to around 7.5%.

Are you saying that the inflation target for the RBI needs to be revised upwards? Or does it need to be redefined?

If you brought the GDP deflator in line with exactly what the consumer price index [CPI] is then we would be home dry because if real growth is 7.5% and the CPI is 4.5% then the nominal growth rate will be 12%.

So you are saying review not the inflation target but the GDP deflator?

The deflator needs to be re-evaluated. If you are not willing to do that then your inflation target needs to be re-examined.

Is an inheritance-based wealth tax an option?

As Gandhiji said of western civilisation, it would be a very good idea.

Read more at  http://www.thehindu.com/opinion/interview/seventh-pay-commission-award-can-be-staggered-made-more-generous/article8192710.ece

7th Pay Commission: Where the gains will be delivered

Just how big is the consumer-spending opportunity provided by the report of the Seventh Central Pay Commission released last month?

For consumer-facing businesses, especially makers of automobiles, consumer goods, electronic items and houses, the Pay Commission is a window of opportunity to tap the greater disposable income in the hands of the staff of India’s largest employer.

For consumer-facing businesses, especially makers of automobiles, consumer goods, electronic items and houses, the Pay Commission is a window of opportunity to tap the greater disposable income in the hands of the staff of India’s largest employer.

For the 3 million-odd central government employees, the Pay Commission is a decadal harbinger of hope, outlining their salary increments for the next 10 years. For consumer-facing businesses, especially makers of automobiles, consumer goods, electronic items and houses, it’s a window of opportunity to tap the greater disposable income in the hands of the staff of India’s largest employer.

They are looking at one such imminent opportunity, with the release of the report of the Seventh Central Pay Commission last month. Just how big is this opportunity? How is it spread across various categories of employees? And where are the large pockets?

An estimate of all three facets can be made by juxtaposing data from two reports. The first is the latest Pay Commission report. It gives salary details of the old pay buckets of central government employees, their reorganization into a new pay matrix and the salary increase in each.

The second report is the latest census of central government employees. Although released in 2014, it provides data as on March 2011, counting 3.1 million employees. It gives details of 1.45 million such employees in 73 Indian cities, or 47% of all government employees. Crucially, it breaks up this 1.45 million by their old pay buckets.

For these 1.45 million employees, we used these two data sets to work out their current salary and new recommended pay, and thus their increment. Further, we classified them under three categories: Group A (estimated salary range: Rs.56,000 to Rs.3.1 lakh), Group B (Rs.44,000 to Rs.2.08 lakh) and Group C/D (Rs.22,000 to Rs.1.14 lakh).

We estimate that if the Seventh Pay Commission recommendations are implemented, these 1.45 million employees in 73 cities will see their collective salary increase by Rs.22,932 crore, or about 21%. Even within this set, the top 25 cities account for 80% of central government employees and 82% of estimated salary gains. Put another way, these 25 cities account for 38% of the potential Pay Commission gains.

Use the visualization below to see how many central government employees are there in each of these cities, how they break up by various groups and how much they stand to gain from the Seventh Pay Commission.


The starting point was the way government salary is structured. Broadly, there are three components: pay band, grade pay and allowances. At present, there are four pay bands and 15 levels of grade pay.

Current salary framework

The first pay band is Rs.5,200-20,200. Within this, there are five grade-pay progressions: 1,800, 1,900, 2,000, 2,400 and 2,800. For example, Mr X got a job at this pay band. His basic pay would be Rs.7,000 (Rs.5,200 derived from the pay band and Rs.1,800 as grade pay).

If he stays in the same designation, he would progress within a particular grade pay, with an annual increment of 3%. If he gets promoted, he would still be in same pay band, but will get a higher grade pay of Rs.1,900. In other words, to check the seniority of a government employee, ask their grade pay. The grade pay ranges from Rs.1,800 for Group C employees to Rs.10,000 for Group A officers.

The sum of pay band and grade pay is basic pay. Most allowances, notably dearness allowance (DA) and house rent allowance (HRA), are calculated on basic pay.

The Seventh Pay Commission assumed current DA of 125%. So Mr X would receive Rs.8,750 per month as DA (125% of Rs.7,000). The HRA quantum varies across cities. If Mr X lived in Delhi, he would get an HRA of 30% of basic pay, or Rs.2,100 per month.

Thus, the sum total of Mr X’s salary is Rs.17,850: Rs.7,000 basic pay, Rs.8,750 DA and Rs.2,100 HRA. This is the lowest possible salary in central government service today.

New salary framework

The Seventh Pay Commission has recommended doing away with the system of pay band and grade pay. In its place come 18 levels, with 1 being the lowest and 18 the highest (cabinet secretary). Broadly, the 15 grade pays are matched with different levels. For example, grade pay of Rs.5,400—what an entry-level Group A officer would get—is now level 10.

The yearly increment is now called pay progression. For each level, the number of pay progression possible ranges from 1 to 40. If he doesn’t get promoted, Mr X will move from 1 to 40 over the next 40 years.

The 18 levels, representing a hierarchy, are arranged horizontally. Pay progression is arranged vertically. The combination of these two is the pay matrix, with 18 columns and 40 rows.

Salary increase

The Pay Commission combined the current basic pay and DA to derive the new basic pay. Next, it increased salary by 16% on this new basic pay. This amounts to 2.57 times the current basic pay. For Mr X, the new basic pay would be Rs.17,990, as compared to Rs.7,000 now. On top of this will be new HRA, calculated at 24% of basic pay.

Basic pay: Rs.7,000 (current); Rs.17,990 (recommended)

DA: Rs.8,750 (current)

HRA: Rs.2,100 (current); Rs.4,318 (recommended)

Total: Rs.17,850 (current); Rs.22,308 (recommended)

Mr X, because of the Seventh Pay Commission’s recommendation, will now see a 25% increase in salary.

Increase for 73 cities

Now that we know the different levels of earnings of government employees, the next step is to estimate the number of employees at each of the different levels in different cities.

For this, we tapped the Census of Central government employees. Although released in 2014, it shows data as on March 2011, counting 3.1 million employees. This contained details of how many central employees were there for 73 cities. Further, in each of the cities, there were details of the number of employees in each grade pay.

We matched this data with the pay matrix suggested by the Seventh Pay Commission. Multiplying the number of employees at each grade pay will give the total salary bill, sliced for each city and for different levels.

We made two assumptions:

1. City-wise age data was not given. So, we took the age break up for all central government employees from the Pay Commission report, and applied it across cities. There were four age groups (20-30 years, 30-40 years, 40-50 years and 50-60 years). We divided pay progression (of 40 steps) for each level into four equal groups.

So, in level 1, we averaged the first 10 steps in the pay progression, and assigned this amount to 20-30 years. Approximately, 22% of employees are in 20-30 years. The total number of employees was multiplied by 0.22. Multiplying the two numbers gave us the salary bill for 20-30 year olds in level 1. We repeated this for other age groups and across levels.

2. The second was related to the sole grade pay band applicable both Group B and Group A employees; we assigned equal employees to both groups. Further, in some cases, Census data has given one employee count by combining two grade pay. Here, we apportioned half the employee count to each grade pay.

Read at  http://www.livemint.com/Politics/upPWXok9eOxfhBXHKLQ46L/The-73-cities-where-half-of-Pay-Commission-gains-reside.html