7th CPC Minimum Pay Calculation Comparison with few State Governments

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 with effect from 1.7.2014 is based on the recommendations of the 10th Pay Revision Commission and relates to index level of 239.92 points of AICPI (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 Pradesh on the basis of the recommendation of 10th Pay Revision Commission relates 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.

(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 .