Thursday, 15 September 2016

Minimum Pay and Multiple Factor after 7th CPC: Memorandum Submitted to Secretary (GOI) by IRTSA

Memorandum Reg Minimum Pay & Multiplying Factor of 7th CPC - submitted by IRTSA
INDIAN RAILWAYS TECHNICAL SUPERVISORS ASSOCIATION 
(Estd. 1965, Regd. No.1329, Website http://www.irtsa.net ) 

M. Shanmugam,
Central President, IRTSA
# 4, Sixth Street, TVS Nagar, Padi,
Chennai - 600050.
Email- cpirtsa@yahoo.com
Mob: 09443140817
Harchandan Singh, 
General Secretary, IRTSA, 
C.Hq. 32, Phase 6, Mohali, 
Chandigarh-160055. 
Email-gsirtsa@yahoo.com 
(Ph:0172-2228306, 9316131598) 
No: IRTSA/CHQ / Memo CPC MF / 2016-16
Date: 14-9-2016 
Additional Secretary (Expenditure),
Government of India,
North Block,
New Delhi-110001
For kind consideration of the Committee of Secretaries 
- On Minimum Pay & Fitment Factor of 7th CPC 

Subject: MINIMUM PAY & MULTIPLE FACTOR AFTER 7TH CPC

Reference: i) Para 10.1.67 of Report of 7th Pay Commission
ii) Para 3 & 4 of Resolution No. 1-2/2016-IC dated 25-7-2016 of Govt of India on 7th CPC Report

We have to make the following submissions for the kind consideration of the Committee for regarding Minimum Pay and Fitment / Multiplication Factor: 

1. MODIFICATIONS ACCEPTED BY SUPREME COURT & PRESENT DAY REQUIREMENTS IGNORED BY 7TH CPC FOR DECIDING MINIMUM PAY BY Dr. W. AYKROYED FORMULA 

a) The Minimum Pay Fixed at Rs.18000 by the 7th CPC is very much unjust and meager and ignores the accepted norms in this regard. 

b) The Minimum wage of Rs.18000 proposed by 7th Pay Commission is based on Dr Aykroyed formula for Minimum Need Based Wage which was adopted by 15th Indian Labour Conference held in 1957. This needed to be updated as per present day requirements. As per law of natural justice and as per directions of the Supreme Court of India issued as long back as in 1991 in the case of Reputekos Brett & Co. Vs Workers & others. 

c) Prescribed provision of 25% to cover education, recreation, festivals & medical expenses has been reduced to 15% by 7th CPC. Similarly provision for housing has been reduced from prescribed 7.5% to 3% which are totally inadequate, unjust and unrealistic.. 

d) In para 4.2.8, Step-1, 7th CPC indicated that a family is comprising of three consumption units, as per norms set by 15th Indian Labour Conference (ILC) in 1957. 

e) Computing husband as one unit, wife as 0.8 unit and two children each below the age of 14 as 0.6 unit is very much inadequate and 15th ILC had not considered maintenance of aged parents. 

f) Maintenance and Welfare of Parents and Senior Citizens Act, 2007 make it a legal obligation for children and heirs to provide maintenance to senior citizens and parents, by monthly allowance. 

g) It is therefore, necessary that while calculating cost for maintenance household the aged parents should also be considered as 2 Units besdes the husband, wife, two Children as consumption units per family and the same should be taken at least as four (if not five) instead of three. 

h) Dr. W. Aykroyd formula on food & other requirements and associated requirements specified by 15th ILC shall be applied for 4 consumptio units per family. 

i) Minimum Pay works out to be Rs.24,000 (instead of Rs.18000 recommended by the 7th CPC) and the multiple factor 3.43 (instead of 2.57 recommended by the 7th CPC) 

j) Table-1 of 7th CPC for calculation of minimum pay needs to be redrawn as under by keeping 4 consumption unit per family: 
Table-1

Calculation of Minimum Pay as on 01.01.2016 for four consumption unit per family
Per day PCU
Unit
Per month 
4 PCU
Unit
Price/Unit
R s.
Expenses
R s.
1
Rice/Wheat
475
gm
57.00
kg
25.93
1478.01
2
Dal (Toor/Urad/Moong)
80
gm
9.60
kg
97.84
939.26
3
Raw Vegetables
100
gm
12.00
kg
58.48
701.76
4
Green Vegetables
125
gm
15.00
kg
38.12
571.80
5
Other Vegetables
75
gm
9.00
kg
32.80
295.20
6
Fruits
120
gm
14.40
kg
64.16
923.90
7
Milk
200
ml
24.00
litre
37.74
905.76
8
Sugar/Jaggery
56
gm
6.72
kg
37.40
251.33
9
Edible Oil
40
gm
4.80
kg
114.02
547.30
10
Fish
3.33
kg
268.38
894.60
11
Meat
6.67
kg
400.90
2672.67
12
Egg
120
no.
4.27
512.40
13
Detergents etc
Rs/month
388.41
388.41
14
Clothing
7.33
meter
164.88
1208.57
15
T otal (1-14)
12290.97
16
Fuel, Electricity, Water Charges
3072.74
17
Total-(15) divided by 0.8
15363.71
18
Marriage, Recreation, Festivals, etc.
2711.24
19
T otal-(17) divided by 0.85
18074.95
20
Provide for Skill by adding 25% to (19)
4518.74
21
Sum (19+20)
22593.69
22
Housing @
698.77
23
T otal-Divide no.21 by 0.97
23292.47
24
Step up of 3% on No.23 as DA is projected at 125% on 01.01.2016
698.77
25
Final Minimum Pay as on 01.01.2016 (23+24)
23991.24
26
Rounding off
24000

2. MINIMUM PLUS DA WITH 40% FIXATION BENEFIT
a) 40% fixation benefit was given over 4th CPC scale to 5th CPC scale in general to all the scales. 

b) 40% of maximum of 5th CPC scale was given over 5th CPC scale as fixation benefit in general in 6th CPC scales. 

c) But, only 14.29% (i.e even less than 15%) of basic pay has been given as fixation benefit is after the 7th CPC over 6th CPC pay, which is grievously inadequate. 

d) Table-2 given below gives the comparison on fixation benefit given after 6th CPC & after 7th CPC.
Table-2

5th CPC
6th CPC
% increase  from  5th CPC Pay + DA to 
6th CPC Pay

6th CPC 
Pay + 
125% DA

7th CPC Pay
% increase 
from 6th CPC 
Pay + DA to
7th CPC

5th
CPC Pay

5th CPC 
Pay + 
DA 86%

PB
GP
6th
CPC 
Basic Pay

2750
5115
PB-1
1800
7000
36.85%
18000
14.29%
3050
5673
PB-1
1900
7730
36.26%
22050
19900
13.68%
3200
5952
PB-1
2000
8460
42.14%
24507
21700
19.66%
4000
7440
PB-1
2400
9910
33.20%
25389
25500
15.18%
4500
8370
PB-1
2800
11360
35.72%
30996
29200
16.18%
5000
9300
PB-2
4200
13500
45.16%
35186
35400
16.54%
7450
13857
PB-2
4600
17140
23.69%
42525
44900
22.50%
7500
13950
PB-2
4800
18150
30.11%
51314
47600
12.83%
8000
14880
PB-2
5400
21000
41.13%
59063
53100
16.37%
8000
14880
PB-3
5400
21000
41.13%
63882
56100
18.73%
10325
19205
PB-3
6600
25350
32.00%
66150
67700
16.58%
12000
22320
PB-3
7600
29500
32.17%
81302
78800
17.05%
14300
26598
PB-4
8700
46100
73.32%
94248
118500
14.24%
15400
28644
PB-4
8900
49100
71.41%
145215
131100
19.91%
14300
26598
PB-4
10000
53000
99.26%
153059
144200
35.21%

e) The Multiple Factor of 2.57 proposed by the Pay Commission for Pay Fixation is totally unjust, inadequate and arbitrary especially keeping in view the high inflation (in real terms and wage rise in the organized sector including the PSUs after two revisions in PSUs since the Sixth CPC. The Fixation Benefit needs to be at least 40% - as after the last two Pay Commissions and the Common Multiple Factor may please be fixed at least (Pay+DA) + 40% of Pay + DA, ie. 3.15 times of 6th CPC basic pay. 

Table -3 showing calculation of new pay which will be equal to Pay + Pay fixation benefit equal to 40% of 6th CPC Pay + DA

1
Minimum Pay (6th CPC)
7000
2
DA @ 125%
8750
3
Pay + DA
15750
4
Fixation benefit (40% of Pay + DA) & Proposed increase in real wage
6300
5
N ew Pay (3+4)
22050
6
Increase in basic pay (in Rs.) (5 – 1)
15050
7
No. of times increase in basic pay
3.15
8
Real wage no. of times increase
1.40
k) Minimum Pay works out to be Rs.22,100 (instead of Rs.18000 recommended by the 7th CPC) and the multiple factor 3.15 (instead of 2.57 recommended by the 7th CPC) 

3. MINIMUM PAY BY MERGER OF DA EVERY TIME THE DA RISES BY 50% 

a) Merger of DA with Pay & Pension was always done every time the DA crossed 50%, except after the Sixth Pay Commission and that norm justifiably needs to be restored. 

b) Minimum Pay as on 1-1-2016 would be Rs.19,687 if DA was merged with Pay when the DA crossed 50% (from 1-1-2011) and when it crossed 100% even without any relief or fixation benefit of 7th CPC and the Minimum Pay would bebRs. 22,483 or say 22,500 with 14.29% of total emoluments Fixation benefit given by the 7th CPC (which itself was the lowest ever after any CPC) - as per detailed calculations submitted below: 

4. a) Minimum Pay after DA Merger at 50% & 100% and with 14.29% rise. 

7000x1.5 = 10500 x 1.5 = 15750x1.25 = Rs.19687x1.1429 = 22500.272 or say Rs.22000 

b) Fitment Factor after DA Merger at 50% & 100% and with 14.29% rise 

                         = 22500 / 7000 = 3.21 times of BP 

c) Even if the Merger of DA was done only once after it crossed 50% (on 1-1-2011), Minimum Pay as on 1-1-2016 would have been Rs.18375 (without any relief or fixation benefit of CPC) and Rs.20984 or say Rs.21000 with 14.2% Fixation benefit given by the 7th CPC as per details below: 

d) Minimum Pay after DA Merger at 50% & 100% and 14.2% rise: 

              = 7000 x 1.5 = 10500 x 1.75 = 18375 x 1.1429 = Rs.21000.7875 or say Rs.21000. 

e) Fitment Factor after DA Merger at 50% and 14.2% rise 

                21000 / 7000 = 3 times of BP 

f) All the foregoing calculations of Minimum Pay and Fitment Factor are linked to only 14.2% rise of wages as inherent in the recommendations of 7th CPC – which is the lowest ever rise after a Pay Commission in recent years. 

g) The minimum Pay may please be fixed as Rs.22500 and the multiple factor for revision of Pay and Pension may please be fixed as 3.21. 

4. It is, therefore, requested that, in view of above submissions: 

a) Minimum Pay may please be fixed as Rs.24,000 and the multiple factor 3.43, by modifying Dr. W.Aykroyed Formula & 15th ILC norms by duly taking into account Maintenance and Welfare of Parents and Senior Citizens Act, 2007. (or) 

b) Minimum Pay be fixed as Rs.22,100 and the multiple factor 3.15 by giving 40% fixation benefit for the 6th CPC Pay & DA. (or) 

c) Minimum Pay may please be fixed as Rs.22500 and the multiple factor for revision of Pay and Pension may please be fixed as 3.21, by merging the DA with Pay whenever it crossed 50% with fixation benefit of 14.2% equitant to the rise recommended by 7th CPC. 

Thanking you in anticipation,
Yours faithfully, 

Sd/- 
Harchandan Singh, 
General Secretary, IRTSA 
Source:- IRTSA

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