Comparison of Minimum Pay

Comparison of Minimum Pay of Central Government and a few State Governments as on 1/7/2017.

Pay Commission Objective: It is the endeavour of every pay commission to ensure that the pay and allowances of employees should be ‘fair and reasonable’. The pay structure should also motivate the employees to reasonable levels of performance in the tasks assigned to them, so that the general public derive the benefit of their service as intended.

7th CPC of Central Government: The Central Government has been following the practice of pay revision for employees once in ten years. Pay scales of the Central government employees have been revised with effect from 1.1.2016 based on the report of the Seventh Central Pay Commission. The revised minimum pay effective from 01.01.2016 is 2.57 times the pre-revised basic pay. The minimum pay of the central employees has been worked out at Rs.18,000/- per month and represents a real increase of 14.29% of the pre-revised wages. The multiplication factor adopted for revising all the other scales ranges between 2.57 and 2.72 resulting in maximum pay of Rs.2,05,400 corresponding to the highest pre-revised pay scale other than the apex pay scale of Rs.80,000 which is raised to Rs.2,25,000. The Cabinet Secretary’s pay is fixed at Rs.2,50,000.

Employees Associations (Staff side JCM) have also sought minimum pay revision to Rs.26,000 with effect from 01.01.2016.

Pay Revision of various State Governments

Government of Kerala Pay Scales: The revised pay structure introduced by the Government of Kerala witheffect from 1.7.2014 is based on the recommendations of the 10th PayRevision Commission and relates to index level of 239.92 points ofAIACPI (IW). Basic Pay of Group “D” employee is fixed at Rs 16500/-

The rates of increment range from Rs.500 to Rs.2,400. The payment of DA formula is unaltered and continues to be as per the central government formula to neutralise the price rise over and above the 239.92 points twice in a year.

Andhra Pradesh Pay Scales: The revised pay structure formulated by Government of Andhra Pradeshon the basis of the recommendation of 10th Pay Revision Commissionrelates to index level of 220.61 points of AIACPI (IW), Basic Pay of Group “D” employee is fixed at Rs 13000/-

The HRA ranges from 30% to 12% of basic pay subject to a maximum of Rs.20,000 depending upon the classification of places and pay.

Karnataka Pay Scales: The revised pay structure formulated by Government of Karnataka on the basis of the recommendation of 6th Pay Revision Commission relates to index level of 276.9 of AIACPI (IW).

Costs of consumable items obtained from the Department of Economics & Statistics, Government of Karnataka are utilised for their calculation.

CLICK HERE FOR REPORT 
http://www.finance.kar.nic.in/6thPay/6thPayComReport.pdf

(For English version read from page number 135 on wards)

The 6th pay commission appointed by the Karnataka Government recommended a 30% increase in the salaries of around 5,20,000 government employees and 73,000 employees from “aided institutions”.

The revision of pay and pension is to come into effect from 1 July 2017 with benefits paid from 1 April 2018. The Group “D” minimum basic pay is fixed at Rs 17000/-.

Methodology for calculation of minimum wage adopted by Pay commissions both Central and State Pay Commissions

Central pay commissions as well as pay commissions in some states have adopted the approach of determining the minimum pay for employees based on the cost of a minimum acceptable standard of living for a household. This is calculated on the basis of the current prices of daily necessities like food, clothing, housing, etc., for a family of three consumption units typical in the case of young employees starting their careers in government. The normative consumption requirements of the family as adopted in the 15th Indian Labour Conference in 1957 are considered for this purpose. While the minimum pay is thus worked out on the basis of a set of quantitative norms and based on Dr. Wallace Aykroyd’s formula , the maximum pay for employees at the highest levels is to be determined as that required to attract and retain persons of qualifications and skills appropriate for the higher positions in government services.

Comparative picture of pay of Central Government and State Government in regards to minimum wage as on 1.7.2017

Govt. of India
Group “C” Min Basic Pay =Rs 18000/-
DA 5% = Rs 900/-
Total Basic Pay + DA =Rs 18900/-

Andhra Pradesh & Telangana
Group “D” Min Basic Pay =Rs 13000/-
Provide for Skill by adding 25% =Rs 3250-
Total Group “C” Min Basic Pay = Rs 16250/-
DA @ 24.1% = 3916/-
Total Basic Pay + DA=Rs 20166/-

Kerala
Group “D” Min Basic Pay =Rs 16500/-
Provide for Skill by adding 25% Rs 4125/-
Total Group “C” Min Basic Pay =Rs 20625/-
DA @ 14% = 2887/-
Total Basic Pay + DA= Rs 23512/-

Karnataka
Group “D” Min Basic Pay = Rs 17000/-
Provide for Skill by adding 25% = Rs 4250-
Total Group “C” Min Basic Pay = Rs 21250/-
DA = NIL
Total Basic Pay + DA = Rs 21250 /-

Ratios between minimum and maximum pay

The existing ratios between minimum and maximum pay of the central government and the States is as follows:

Government of India 1 :12.5
Andhra Pradesh 1:8.527
Kerala 1 :7
Karnataka 1:8.86

The gap is highest in Central Government should be reduced ratios between minimum and maximum pay to 1: 8

Hence there is need for revision of minimum wage for Central Government employees and also fitment formula on the lines of the State Government Pay Commissions, the State Government economic conditions are not as good as the Central Government still the State Governments are paying more for their employees comparing it to the Central Government, in case of the 7th CPC the Central Government Employees got only 14.29% , the Group “A” and above officers of Central Government got more pay hike due to higher fitment formula of 2.72 . Thus injustice is done for Group “C” and Group “B”.

whereas the Karnataka State Government employees got 30% wage hike , Central Government Employees got only 14.29% wage hike , the uniform multiplication factor should be fixed for the Central Government employees and also Central Government Employees should also get 30% wage hike .

Source: www.karnatakacoc.blogspot.in

The post 7th Pay Commission Minimum Pay Calculation: Comparison of Methodology for calculation of minimum Pay of Central Government and a few State Governments as on 1/7/2017 appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

The Commission has estimated the minimum pay (the calculations for which have been tabulated in the Annexure) through the following steps:

Step 1 : The food, clothing and detergent products listed and their respective quantities specified by the 15th ILC have been adopted. These quantities indicate the monthly consumption of the listed products by a family comprising three consumption units. [For e.g. for the product ‘Dal’ the quantity specified for daily consumption is 80 grams per consumption unit per day. The monthly consumption of Dal by a consumption unit thus works out to 2.4 kg (80 x 30). Accordingly the monthly consumption of Dal by a family comprising 3 units is 7.2 kgs (2.4 x 3).]

Step 2 : The quantities have been multiplied by their respective product prices to arrive at product wise cost. The price adopted for each product is the average of prices of various items that are included in the product. The price of an item is the average of its prices prevailing in each month from July, 2014-June, 2015. [At monthly family consumption of 7.2 kg the Commission has estimated the monthly expenditure on Dal at Rs.704.44 after calculating the price of Dal at Rs.97.84 per kg. The price of Dal has been calculated as the average of prices of Toor, Urad and Moong Dal items specified under the product Dal and whose prices have been determined at Rs.87.86, Rs.109.66 and Rs.96.00 respectively. The prices of these three Dal items are the twelve monthly average prices for the period July, 2014–June, 2015.] The prices of all items have been sourced from Labor Bureau, Shimla. These prices are used in the calculation of the CPI (IW) and subsequently the calculation of Dearness Allowance. In the current exercise the prices of all items are for the period July 2014-June 2015 and have been used in the calculation of DA at 119 percent operative from 01.07.2015.

Step 3 : The cost of food, clothing and detergent products obtained from Step 2 has been divided by 0.8 to arrive at a total, of which 20 percent provides for fuel and lighting expenses. This addresses the fifth component under para 4.2.3. The fourth component on housing under para 4.2.3 has not been addressed at this stage as its quantification at the final stage of pay estimation is considered more appropriate by the Commission.

Step 4 : The cost estimated from Step 3 is divided by 0.85 to arrive at a total, of which 15 percent is towards recreation, ceremonies and festivities. The prescribed provision of  25 percent to cover education, recreation, ceremonies, festivals and medical expenses has been moderated to 15 percent because expenses on educational and medical necessities are being separately provided for through relevant allowances and facilities and thus need not be provided here. This partially addresses the first of the two components outside the 15th ILC norms.

Step 5 : The cost estimated from Step 4 is increased by 25 percent to account for the skill factor, following the reasoning that there is no unskilled staff in the government after the merger of Group D staff in Group `C’. This addresses the second of the two components outside the 15th ILC norms.

Step 6 : The cost estimated from Step 5 is divided by 0.97 to arrive at a total, of which 3 percent provides for housing expenses. This is done in view of the observation that license fees for government accommodation is about 3 percent of the total pay. This addresses the fourth component stated under para 3 but partially so, as the 15th ILC norms had fixed the housing provision at 7.5 percent.

Step 7 : The cost estimated from Step 6 is as on 1 July, 2015 when the DA was 119 percent. The DA is assumed to be 125 percent as on 1 January, 2016, the day from which the Commission expects its recommendations to be implemented by the government.

Accordingly the cost estimated from Step 6 has been increased by 3 percent (2.25/2.19 = 1.027 or nearly 3%).

Authority: http://7cpc.india.gov.in/pdf/sevencpcreport.pdf

The post 7th CPC Recommendations on Minimum Pay Calculation – Reports Step by Step appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.