7th CPC: Providing proper minimum wage of Rs 27000/- for CG Employees Pay fixation formula

The staff side of the JCM had given representation demanding Rs 10,000/- as
minimum wage for Central Government Employees. The 6th CPC in its report
vide para no 2.2.15 had calculated a minimum wage of Rs 5478/- today if we
are calculate the minimum wage it should be more than Rs.21,000/- apart
from HRA and other allowances. Hence there is three times increase in
actual prices calculated by the 6th CPC and the current prices.The current
wages of the CG Employees should be doubled at least including that of GDS.

The most comprehensive criteria for covering all the basic needs were
evolved by the 15th Indian Labour Conference (ILC) in 1957 for fixing
minimum wages. The norms are that a need-based minimum wage for a single
worker should cover all the needs of a worker’s family consisting of a
spouse and two children.

The food requirement was to be 2,700 calories, 65 grams of protein and
around 45-60 grams of fat as recommended by Dr Wallace Aykroyd for an
average Indian adult of moderate activity. Dr Aykroyd pointed out that
animal proteins, such as milk, eggs, fish, liver and meat, are biologically
more efficient than vegetable proteins and suggested that they should form
at least one-fifth of the total protein.

Dr Aykroyd
worked on nutrition for nearly 30 years and was director of the Nutrition
Division, Food and Agriculture Organisation, United Nations. In 1935, he
was appointed Director of the Government’s Nutritional Research Centre in
India, situated in Coonoor in the south.

The 15th ILC further resolved that clothing requirements should be based on
per capita consumption of 18 yards per annum, which gives 72 yards per
annum for the average worker’s family. For housing, the rent corresponding
to the minimum area provided under the government’s industrial housing
schemes was to be taken. Fuel, lighting and other items of expenditure were
to constitute an additional 20% of the total minimum wage.

The Supreme Court upheld these criteria in the case of Unichoy vs State of
Kerala in 1961. In the later Raptakos Brett Vs Workmen case of 1991, the SC
went one step further, and held that besides the five components enunciated
by the 15th ILC, minimum wages should include a sixth component, amounting
to 25% of the total minimum wage, to cover children’s education, medical
treatment, recreation, festivals and ceremonies. The SC also observed that
a wage structure including the above six components would be “nothing more
than minimum wage at subsistence level” which the workers must get “at all
times and under all circumstances”.

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Minimum Salary-Analysis &Recommendations para 2.2.15

The Commission, however, agrees that the norms set by the 15th
International Labour Conference (ILC) are appropriate for computing minimum
salary. It is also observed that the minimum salary is applicable at the
time a person joins the Government which will usually be at a young age
when a person may be just married and will not have responsibility of
parents or many children.

Accordingly, the family unit for minimum salary can only be taken as
three.

The Minimum Salary should be based on 6 units not three units as per
6th CPC calculation.

As both parents and two children are depending on the salary of Government
servant apart from spouse. the additional burden the employees will carry
after a few years of service as his parents would have retired from service
and are wholly dependent on him also his children would have stepped into
school / college level, even small baby requirements are much unlike in the
past years, the hence the minimum wage he gets will not compensate with the
family financial burden Hence the whole calculations needs a undergo a
drastic change in next CPC taking into account of 6 units rather than 3
units .

The Sixth Central Pay Commission has recommended a minimum wage of Rs
6600/- per month against the demand of Rs.10,000/- per month as worked out
by Staff side of JCM. Today the minimum need based wage works out to
Rs.21,000/ per month+ HRA+ allowances.The general minimum expenses per
month for a family of four members are as follows when a Government servant
joins the duty with two small children:

a) Vegetables Rs.3000/- 

b) Food Grains /Groceries Rs.7000/-. 

c) House rent single room Rs.6000/- 

d) Clothing Rs.3000/- 

e) Children education and their expenses Rs.2000/- 

f) Electricity Chargers Rs.800/- 

g) Water Charges Rs.250/- 

h) Transportation charges Rs.1000/- 

i) TV cable rent Rs.300/- 

j) Medical Expenses Rs.500/- 

k) Mobile expenses Rs.250/- 

l) Cooking Gas Rs.450/- 

m)Recreation charges Rs.500/- 

n) Personal expenses Rs.1000/-

Total Rs 26500/-Hence minimum wage works out to Rs 27,000/-

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The expenses will increase as the age of Government servant goes up and
family responsibility will increase as he has to educate the children in
professional courses, marriage of his children has to be performed, his
medical expenses will increase, his parents will stay with him and now
there are quite dependant on the Government servant for their lively hood.
As such the salary should be more to meet his expenses. The Government is a
model employer hence the wages should be provided with the needs.

Table:

Fixation of Minimum wage as on 1.1.2006 as per 15 ILC norms as per Table
2.2.1 of the 6th CPC report and the minimum wage as per current prices we
compare minimum wage should be three times the 6th CPC recommendations.

Source: Average market rates in Kolkata, Chennai, Delhi and Mumbai as
indicated in the Economic Times & Other major dailies (element of 20%
has been added to cover the increase in cost in retail sale).

Notes PCU = Per day Consumption Unit 3CU = Three Consumption Units that
is wife, husband and a child no parents or second child is taken into
account.

* 20% Miscellaneous charges towards fuel, electricity, water etc.

** Additional Expense at the rate of 25% includes expenditure towards
education, Medical treatment, housing, recreation, festivals etc.

# Has been taken as Rs.400 because separate allowances for education,
medical Treatment and housing exist in the Government. Consequently, only the 

expenditure 

Towards recreation & festivals need to be taken in account.

^ Being the license fee chargeable for government accommodation at an  average rate of 3% of the basic pay.

Total minimum wage is Rs 17225+ HRA Rs 7000/- + Transportation Allowance Rs
2500/-= Rs 26725 that is Rs 27,000/-

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The fixation of minimum basic pay of Rs 21000/- is taking into the
account of minimum skill and education requirement as 10th Standard as
prescribed by the 6th CPC. As the education requirement is more such as
Diploma in Engineering or Degree in Science or Commerce, then the
minimum basic pay should be Rs.40,000/- (8700+4200) X 3 = Rs 39,000/-.
For Engineering Graduates and Master Degree it should be Rs 65,000/- .

The pay scales should start with a minimum basic pay including Grade
Pay of Rs 21,000/- to end with 2, 10,000 with a ratio of 1:10 of
minimum scale and maximum scale. Since government is a model employer
they should provide minimum wages as per the 15 ILO conference and
other wages as per the educational qualification & skill
requirement of the job.

The multiplying factor is calculated as below:

The existing basic pay + Grade pay+ DA 100%+ weightage of 100% ( that is
the difference between the actual price rise and the DA paid) that is the
multiplying factor works out to three.

Note: The actual price rise is over 200% the DA is only 90%.

Or

The existing basic pay + grade pay+ DA 100%+DA merger = Net wage +
weightage of 70% (that is the difference between the actual price rise and
the DA paid).

The pay scales should have a multiplying factor of three, that means the
existing pay scales and pay (basic pay + GP) should be multiplied by
three.The pay scales arrived should not have any bunching of basic pay as
done in the 5th CPC. The time scales should last for more than 10 years so
that there is no stagnation.

The concept of fair wages has been deprived to CG Employees. Usually pay
commissions had adopted a multiplying factor of 3.2 to 3.8 to arrive at the
new scales compared to earlier scales. But the VI CPC adopted conversion
factor of about 2.6 at the lowest where as it was about 3.6 at the highest
scale. By this method well established ration 1:12 between the lowest scale
and highest scale was disturbed by the VI CPC.

The minimum pay & band pay fixed by the 6th CPC was very low compared
all other pay commissions for example a new recruit for the post of LDC his
pay is Rs 5200+ 1900 = Rs 7100/- + allowances, that should have been
actually Rs 3050 multiplied by 3.6 times which works out to Rs.11000/- .

In case of a Graduate or Diploma holder as per 6th CPC it is Rs 9300 +
4200= Rs 13500/- + allowances, that should have been actually Rs 5000
multiplied by 3.6 times which works out to Rs 18000/- .

In case of a Master degree holder as per 6th CPC it is Rs 9300 + 4800= Rs
14100/- + allowances, that should have been actually Rs 6500 multiplied by
3.6 times which works out to Rs 23000/- .

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Hence the justification of multiplying factor of three is justified.

The ratio between the lowest and highest scales should not more than
1:10

The existing basic pay should be multiplied by factor three, so that
there is no bunching of basic pay. The existing GP of Rs 2000/- and Rs
2800/- should be removed. Likewise there are GP of Rs 5400/- in both
PB-2 and PB-3 one of them is to be removed.

There are 34 scales recommended by the 6th CPC, out of which four Grade Pay
has been not in existence, as such 30 GP are right now available.

With the merger of pay scale from S9 to S12 into Grade Pay of Rs 4200/-

There are many pay scales which was merged into single GP of Rs.4200/-
which has created anomalies, the promotions have been made in same
grade pay without financial benefits.

There should be time scale rather than grade pay system, these time
scales should long enough.