Thursday, January 30, 2014

MoD babus fined for denying dues to retired IAF officer

MoD babus fined for denying dues to retired IAF officer
By Jugal R. Purohit in New Delhi
IN a rare move, the Armed Forces Tribunal ( AFT) in New Delhi has moved against top bureaucrats in the Ministry of Defence ( MoD) and imposed costs on them up to Rs 10,000 each for delaying and denying the dues of a retired Air Force officer.
The bureaucrats against whom action has been ordered include Sangita Goirala, secretary, Department of Ex- Servicemen Welfare ( DESW), and Dr.
B. K. Singh, Joint Controller of Defence Accounts ( Air Force).
The order was issued on January 21 by the AFT principal bench, comprising Chairperson Justice Prakash Tatia and member Lt.
Gen. S. K. Singh in ‘ Wing Commander ( retd.) V. S. Tomar versus Union of India and others’. In this case, the officer was fighting for his correct pension which was being denied to him. Despite the tribunal deciding in the officer’s favour on December 7, 2011, the MoD did not implement the order claiming that it was challenging the same in the Supreme Court ( SC).
On the officer’s insistence, the tribunal tasked the MoD to implement the order subject to the order of the SC. “ The bench of the tribunal was under bona fide impression that the order of the tribunal will be executed with the above stipulation and therefore, the petitioner’s petition of MA no.
19/ 2012 was disposed of. Neither any order was obtained from the SC nor was the order implemented,” the AFT order mentioned.
A detailed questionnaire was sent to the MoD spokesperson but no reply was received.
“ Personally speaking, the MoD continues to dish out step- motherly treatment to us, and we end up paying the price,” said Wing Commander ( Retd) Tomar.
Commenting on the issue, defence analyst Bharat Verma said, “ Look at the AFT’s frustration that it had to do this.
Orders of the AFT are being ignored and this ministry takes great pride in opposing its soldiers in courts.”
In spite of the tribunal’s order dated 21.01.2013 nothing has been done… It appears there is a deliberate avoidance of the order.
Such an attitude indicates that the filing of SLP may be a pretext for avoiding the implementation of the order.
It is difficult to know the reason as to what is the hitch for the government in punishing the guilty officers in contempt proceeding upon non- implementation of the judicial order of the tribunal.
The ministry is, therefore, directed to submit its stand whether they want to shield the officers in the defence ministry deliberately, continously, consciously.
Secretary, Ministry of Defence, is directed to submit what steps have been taken against the guilty person and what action was taken by the secretary, ministry of defence, consciously
Payment of ` 10,000 by Dr. B. K. Singh, JCDA ( AF)… cost of ` 10,000 is imposed upon the Secretary, Ex- Servicemen Welfare ( Sangita Goirala)…( both officers) shall remain present before us on the next date of hearing

Saturday, January 25, 2014

First victory of BPS-AISCCON joint efforts for the betterment of EPS95 beneficiaries

Fin Min approves Rs 1,000 minimum monthly pension plan
New Delhi: The Finance Ministry has approved a proposal for providing a minimum monthly pension of Rs 1,000 to workers in the organised sector, a move which would benefit 27 lakh pensioners immediately.

The ministry has also approved a proposal for raising the basic wage ceiling under the Employees Provident Fund Scheme to Rs 15,000 from existing Rs 6,500 per month.

At present, there are about 44 lakh pensioners. Of this 27 lakh, including 5 lakh widows, get less than Rs 1,000 a month.

"The Finance Ministry has approved the proposal for providing a minimum monthly pension of Rs 1,000 under the Employees Pension Scheme 1995 (EPS-95) run by EPFO. The ministry also cleared enhancing the wage ceiling to 15,000 under social security schemes run by the retirement fund body," an official source said.

The government will provide additional subsidy of Rs 1,217 crore to ensure the minimum monthly pension of Rs 1,000 starting 2014-15. Pensioners are, therefore, expected to get benefit with effect from April 1 this year.

Labour Minister Oscar Fernandes, however, is yet to decide on whether the move requires the Cabinet approval or not.

The Labour Ministry's proposal on giving a minimum monthly pension of Rs 1,000 under the EPS-95, run by the Employees' Provident Fund Organisation (EPFO), has been pending for a long time.

Earlier, the Labour Ministry had proposed that government should increase subsidy on EPS-95 from 1.16 percent of basic wage to 1.79 percent to ensure minimum pension. However, it did not find favour with the Finance Ministry as this would have resulted in a permanent increase in subsidy.

The Labour Ministry in its revised proposal has asked the Finance Ministry to provide for around Rs 1,217 crore additional amount every year, and indicated that this amount can come down over a period of time with more members subscribing to EPS-95.
The increase in the wage ceiling to Rs 15,000 would be effective only after the notification of the decision by the government.

At present, government contributes 1.16 per cent of basic wage of workers as contribution toward the EPS-95. Government had provided around Rs 1,400 crore for the purpose in 2012-13.

All those employees getting basic wages, including basic pay and dearness allowance, of more than Rs 6,500 per month, are not covered under the social security schemes run by EPFO.

EPFO has a corpus of around Rs 5 lakh crore, including around Rs 1.7 lakh crore in its pension fund. It has a subscriber base of around 5 crore and all of them are covered under the EPS-95.

The increase in wage ceiling under the scheme run by EPFO is important as it would bring in around 50 lakh more workers and increase the flow of mandatory savings.


Saturday, January 18, 2014

Main common demands of Bharat Pensioners Samaj

After holding several conventions & conferences in different parts of the country & interacting with a wide range of Pensioners’ Association & stake holders, BPS has identified the following main common Issues/Demands to be presented to 7th CPC for redress:
1. Settle the anomalies of 6th CPC especially adoption of different multiplication factor in arriving at minimum of PB 1-4 & Scales HAG & HAG+:  Pay commissions upto to 5th CPC adopted a multiplication factor of 3.2 to 3.8 to arrive at the new scales compared to earlier scales but 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 Vth CPC’s established ratio 1:10.7 between the lowest scale and highest scale was disturbed by the VI CPC. Moreover going against the recommendations of 6th CPC Govt. pulled out S30, 31 & 32 from PB 4 and gave them higher scales of HAG & HAG+ which, caused serious disparity within the homogenous class of pensioners, wherein pre 2006 pensioners corresponding to pre revised scales of S30, 31, 32 could get full parity with post 2006 pensioners. But pensioners corresponding to lower scales were deprived of full parity, resulting in violation of Article 14 of the constitution. 7th CPC while recommending new pension revision formula should take care to rectify this disparity & inequality by restoring full parity for all pensioners
2. Amount of Pension: 
Honourable Supreme Court, in its landmark 5 judge Constitutional Bench judgment dated 17.12.1982 in the case D.S.Nakara v/s UOI, ruled:
“A pension scheme consistent with available resources must provide that the Pensioner would be able to live:
(I)                free from  want, with decency, independence and self respect and
(II)             At a standard equivalent at pre retirement level”.
As laid down in Para 127.9 of 5th CPC, the study done by Consultants to 5th CPC, TECS (Tata Economic Consultancy Services) recommended Pension to be 65% of the last drawn.
Bharat Pensioners Samaj demand 65% of the last drawn emoluments or 65% of last 10 months average emoluments, whichever is more beneficial, as pension & 40% as Family Pension subject to the condition that minimum pension shall not be less than 3500X3= 10500/- as there is three times increase in actual prices calculated by the 6th CPC and the current prices or Rs 3500 + DR as on 31.12.2015 + interim relief, if any + 50 percent fitment benefit. Or 65 % of the 7th CPC revised minimum Basic Salary of Central Govt. employees whichever is more beneficial.

3. Minimum fitment benefit for PB 1 to PB 4 @ 50% :  In Para 5.1.47 of their recommendations, the 6th CPC said, “ it will be necessary to allow the same fitment benefit as is being recommended for the existing Government employees”. The fitment benefit to exiting govt. employees was given through Grade pay which is  more than 40% of pre revised basic pay e.g. PB2 GP 4200 for S9, PB3 GP 5400 for S16 & S17 and GP 6600 for S18 whereas in case of pensioners it is 40% of basic Pension. Thus 50% fitment benefit in case of Pensioners is fully justified.

5. Merger of DR with pension whenever it goes above 50%:- The Pension of Central Govt. Pensioners undergo revision only once in 10 years during which period the pension structure gets seriously dis-aligned, 50% increase in price takes place even in less than 5 years. This results in considerable damage to the financial position of the pensioner with otherwise inadequate Pension. As admitted by Shri Montek Singh Ahluwalia, Deputy Chairman, Planning Commission in his statement to PTI on 27.2.2008, DA does not adequately take care of inflation. Working employees are getting automatic relief by way of 25% increase in their allowances with every 50% rise in Dearness Allowance. As pensioners do not get any allowances, they feel discriminated against. In order to strike a balance, DR may be merged with Pension whenever it goes beyond 50% as recommended by 5th CPC.
6. Restoration of commuted portion of pension in 12 years:
Restoration of commuted value of pension in 12 years: Commutation value in respect of employee superannuating at the age of 60 years between 1.1.1996 & 31.12.2005 and commuting a portion of pension within a period of one year would be equal to 9.81 years Purchase. After adding thereto a further period of two years for recovery of interest in terms of observation of Supreme Court in their judgment in writ petitions No 395-61 of 1983 decided in December 1986. It would be reasonable to restore commuted portion of pension in 12 years instead of present 15 years. In case of Person superannuating at the age of 60 years after 31.12.2005 and seeking commutation within a year, numbers of purchase years have been further reduced to 8.194. Also the mortality rate of 60 plus Indians has considerably reduced ever since Supreme Court judgment in 1986. And the life expectancy stands at 69 years now.

Refund Excess Recovery of Commuted Pension by the Govt

As per extant rules, commuted pension is restored after 15 years after the Govt makes full recovery of the commuted amount with interest. This period of 15 years is arbitrary, hypothetical and without any mathematical basis. Calculations show that the recovery exceeds much more than the dues.

Retirees between 1986 and 1995

The age of retirement during that period was 58 years. This category of retirees have all completed the prescribed period of 15 years for restoration of pension. Since 1.3.1971 and until 31.12.2005, the Commutation Factor (CF) was 10.46 for the 59 year old (age next birth day) retirees and the officially prescribed rate of interest was 4.75% p.a. Commutation allowed was 1/3rd of the basic pay. The basic pension of Secretaries who superannuated between 1.1.86 and 31.12.95 at the top of their pay scale (Rs. 8,000) was fixed at Rs.4,000 and the commuted portion of their pension was Rs.1,67,318 with a deduction of Rs.1,333 per month. The principal amount of Rs. 1,67,318 was fully recovered in 10.46 years [10.46 x 12 x 1333 = 1,67,318].
·         If we consider the prescribed interest rate of 4.75% p.a. as simple interest, the total interest works out to Rs.36,250. This is recoverable in 2.27 years [36250/1333 = 27.2 months or 2.27 years]. Thus, total recovery period of the commuted amount works out to 10.46 + 2.27 = 12.73 years. Even after full recovery, the pensioner kept on paying for 15 – 12.73 = 2.27 years. Thus, excess recovery = 2.27 x 12 x 1333 = Rs.36,311.
·         If we consider the prescribed interest rate of 4.75% p.a. as compound interest, the total interest works out to Rs.54,750. This is recoverable in 3.42 years [54750/1333 = 41.07 months or 3.42 years]. Thus, total recovery period of the commuted amount is = 10.46 + 3.42 = 13.88 years. Even after full recovery, the pensioner kept on paying for 15 – 13.88 = 1.12 years. Thus, excess recovery = 1.12 x 12 x 1333 = Rs.17,916.

Retirees between 1996 and 2005

The age of retirement was raised to 60 years after the 5th Central Pay Commission (CPC). Permissible commutation was also raised to 40% of the basic pay. Those who retired between 1996 and 1998 have already completed the prescribed period of 15 years for restoration of pension. Since 1.3.1971 and until 31.12.2005, the Commutation Factor (CF) was 9.81 for the 61 year old (age next birth day) retirees and the officially prescribed rate of interest was 4.75% p.a. Secretaries  who superannuated between 1.1.96 and 31.12.05 at the top of their pay scale (Rs.26,000), were sanctioned commuted pension amount of Rs.9,18,216 with a deduction of Rs.7,800 per month. The principal amount of Rs.9,18,216 is fully recovered in 9.81 years [9.81 x 12 x 7800 = 9,18,216].
·         If we consider the prescribed interest rate of 4.75% p.a. as simple interest, the total interest works out to Rs.2,12,114. This is recoverable in 2.27 years [212114/7800 = 27.2 months or 2.27 years]. Thus, total recovery period of the commuted amount works out to 9.81 + 2.27 = 12.08 years. Even after full recovery, the pensioner keeps on paying for 15 – 12.08 = 2.92 years. Thus, excess recovery = 2.92 x 12 x 7800 = Rs.2,73,312.
·         If we consider the prescribed interest rate of 4.75% p.a. as compound interest, the total interest works out to Rs.3,20,367. This is recoverable in 3.42 years [320367/7800 = 41.07 months or 3.42 years]. Thus, total recovery period of the commuted amount is = 9.81 + 3.42 = 13.23 years. Even after full recovery, the pensioner keeps on paying for 15 – 13.23 = 1.77 years. Thus, excess recovery = 1.77 x 12 x 7800 = Rs.1,65,672.

Retirees from 2006 Onwards

The age of retirement continues to be 60 years. After the 6th CPC, since 1.1.06, the Commutation Factor (CF) has been downgraded from 9.81 to 8.194 for the 61 year old (age next birth day) retirees, thereby reducing the commuted amount by a whopping 16.5% !!! On top of that, the prescribed rate of interest has been enhanced from 4.75% to 8% p.a. which is an astronomical jump of 68% even in this low interest regime!!! The basic pension of Secretaries who superannuated on or after 1.1.06 at the top of their pay scale (Rs.80,000) was fixed at Rs.40,000. Their commuted pension amount is Rs.15,73,248 with a deduction of Rs.16,000 per month. As per the old CF of 9.81, they would have been entitled to a commuted sum of Rs.18,83,520. Thus, there is a huge drop of Rs.3,10,272 !!! The currently sanctioned principal amount of Rs.15,73,248 is fully recovered in 8.194 years [8.194 x 12 x 16000 = 15,73,248].
·         If we consider the prescribed interest rate of 8% p.a. as simple interest, the total interest works out to Rs.5,10,417. This is recoverable in 2.66 years [510417/16000 = 31.9 months or 2.66 years]. Thus, total recovery period of the commuted amount is = 8.194 + 2.66 = 10.85 years. Even after full recovery, the pensioner keeps on paying for 15 – 10.85 = 4.15 years. Thus, excess recovery = 4.15 x 12 x 16000 = Rs.7,96,800.
·         If we consider the prescribed interest rate of 8% p.a. as compound interest, the total interest works out to Rs.9,93,007. This is recoverable in 5.17 years [993007/16000 = 62.06 months or 5.17 years]. Thus, total recovery period of the commuted amount is = 8.194 + 5.17 = 13.37 years. Even after full recovery, the pensioner keeps on paying for 15 – 13.37 = 1.63 years. Thus, excess recovery = 1.63 x 12 x 16000 = Rs.3,12,960.

The above calculations are only illustrative, applicable to retired Secretary rank officers who retired on or after 1.1.86 at the top of their pay scale and their pension was fixed at the maximum. Calculations can be made similarly for other cases and the results would tally.

We may point out that the interest charged on various Govt. advances like House Building Advance, Car Advance, Festival Advance, Marriage Advance etc. is simple interest and not compound. Applying the same policy, the commuted amount of pension was fully recovered with interest in 12.73 years in case of 1st category of retirees (who retired between 1986 and 1995), in 12.08 years in case of 2nd category of retirees (who retired between 1996 and 2005) and in 10.85 years in case of 3rd category of retirees who retired in 2006 or after. There is no justification for the Govt. to recover anything more than what it has advanced to the retirees.

Logical Recovery Period

The Govt. should be moved to rectify this wrong and modify the period of restoration of commuted pension as under:-

  1. 1st category of retirees (who retired between 1986 and 1995): They have already repaid the entire amount with interest. The excess amount recovered should be refunded to them with the same rate of interest as was charged from them for recovery (i.e. 4.75% p.a.).
·         The same policy should be adopted towards those who retired before 1986. Similar calculations can be done in their case.
  1. 2nd category of retirees (who retired between 1996 and 2005): Those who retired 15 years ago have already repaid the entire amount with interest. The excess amount recovered should be refunded to them with the same rate of interest, i.e. 4.75% p.a. For others, the recovery should be stopped and full pension should be restored after completion of 12.08 years.
  2. 3rd category of retirees who retired in 2006 or after: The recovery should be stopped and full pension should be restored after completion of 10.85 years.

7. Enhancement of FMA: As is recorded in Para 5 of the minutes of Committee of Secretaries (COS) held on 15.04.2010 (Reference Cabinet Secretariat Rashtrapati Bhavan No 502/2/3/2010-C.A.V Doc No. CD (C.A.V) 42/2010 Minutes of COS meeting dated 15.4.2010) which discussed enhancement of FMA: CGHS card estimates for serving Personnel since estimates are not available separately for pensioners M/O Health & family Welfare had assessed the total cost per card p.a. in 2007-2008 =Rs 16435 i.e. Rs.1369 per month for OPD. Adding to its inflation the figure today is well over Rs 2000/-PM. Ministry of Labour & Employment, Govt. of India vide its letter no. G-25012/2/2011-SSI dated 07.06.2013 has already enhanced FMA to Rs 2000/-PM for EPFO beneficiaries. Thus, to help elderly pensioners to look after their health, FMA for all C.G. Pensioners be raised to at least Rs 2000/- PM without any distance restriction linking it to Dearness Relief for automatic further increase. Adequate raise in FMA will encourage a good number of pensioners to opt out of OPD facility which will reduce overcrowding in hospitals. OPD through Insurance will cost much more to the Govt. As such the proposal for raising Fixed Medical allowance to Pensioners is fully justified and is financially viable.

EXEMPT FMA FROM INCOME TAX: Fixed Medical Allowance (FMA) is a compensatory allowance to reimburse the medical expenses. As Medical Reimbursement is not taxable, FMA should also be exempted from Income Tax.

8. Age related additional pension: In their Para 5.1.32, the 6th CPC  agreed that older pensioners require a better deal because their needs, especially those relating to health, increase with age. Accordingly, the Commission recommended that quantum of pension available to the old pensioners should be increased as follows:-
On attaining age of Additional quantum of pension
80 years - 20% of basic pension
85 years - 30% of basic pension
90 years - 40% of basic pension
95 years - 50% of basic pension
100 years - 100% of basic pension
In the present scenario of climatic changes, presence of pesticide & rising pollution old age disabilities/diseases set in by the time an employee retires and go on manifesting very fast, needing additional finances to take care of these disabilities & diseases especially as the cost of health care has gone very high compared to 01.01.2006. It is, therefore, demanded that 5% upward enhancement in pension be granted every five years’ after the age of 60 years.
9. Pension to be net of Income Tax:  Purchase value of pension gets reduced day by day due to continuously high inflation and steep rise in cost of food items and medical facilities. Retired persons/Sr. citizens do not enjoy fully public goods and services provided by Government for citizens due to lack of mobility and many other factors. Their ability to pay tax gets reduced from year to year after retirement due to ever-increasing expenditure on food and medicines and other incidentals. Their net worth at year end gets reduced considerably as compared to the beginning of the year. Inflation, for a pensioner is much more than any tax. It erodes the major part of the already inadequate pension. To enable pensioners, at the far end of their lives, to live in minimum comfort and to cater for ever rising cost of living, they may be spared from paying Income Tax. We, therefore demand that pension should be net of income tax as recommended by 5th CPC, vide their Para 167.11

10.Medical facilities : To ensure hassle free health care facility to Pensioners/family pensioners, Smart Cards be issued irrespective of departments to all Pensioners & their Dependents  for cashless medical facilities across the country. These smart cards should be valid in
i)                    all Govt. hospitals
ii)                  all NABH accredited Multi Super Specialty hospitals across the country which have been allotted land at concessional rate or given any aid or concession by the Central or the State govt.
iii)                 all CGHS, RELHS & ECHS empanelled hospitals across the country.
No referral should be insisted in case of medical emergencies. For the purpose of reference for hospitalization & reimbursement of expenditure thereon in other than emergency cases Doctors/Medical officers working in different Central/State Govt. department dispensaries/health units should be recognized as Authorized Medical attendants. Reimbursement bill for treatment both for hospitalization & OPD can be made by respective departments.
The enjoyment of the highest attainable standard of health is recognized as a fundamental right of all workers in terms of Article 21 read with Article 39(c), 41, 43, 48A and all related Articles as pronounced by the Supreme Court in Consumer Education and Research Centre & others Vs Union of India (AIR 1995 Supreme Court 922) The Supreme court has held that the right to health to a worker is an  integral facet of meaningful right to life to have not only a meaningful existence but also robust health & vigour. Therefore right to health, medical aid to protect the health & vigour of a worker while in service or post retirement is a fundamental right-to make life of a worker meaningful and purposeful with dignity of person. Thus health care is not only a welfare measure but is a Fundamental Right. As all the pensioners, irrespective of pre-retiral class and status, belong to same category of citizens & the same homogenous group. There should be no class or category based discrimination and must be provided Health care services at par with IAS & ex Ministers.
To ensure that the hospitals do not avoid providing reasonable care to smart card holders & other poor citizens, a Hospital Regulatory Authority should be created to bring all NABH   accredited hospitals & NABL accredited diagnostic Labs under its constant monitoring of quality, rates for different procedures & timely bill payments by Govt. agencies and Insurance companies. CGHS rates be revised keeping in mind the workability & market conditions. 
Er. S.C.Maheshwari
Secy Genl. Bharat Pensioners Samaj

Friday, January 17, 2014

Merger of 50 percent DA may soon be considered by Central Government – Sources

Merger of 50 percent DA may soon be considered by Central Government – Sources

Sources close to the Central Government Employees Federations told that Merger of 50% DA will soon be considered by Central Government before the budget session of Parliament in February 2014. According to the sources, the central government is likely to consider the central government employees  demand for merging of 50 % DA, for the reason that the DA will be crossing 100% level after January 2014.

The rate of dearness allowance to be paid to govt servants has been increasing consistently due to the rise in the prices of essential commodities for the past two years. In 2011 the rate of DA was at 50 % level. Since then all the Federation demanded the central government to merge the 50 Percent DA with basic Pay. But the government did not accept this demand to merge the DA with basis pay, as it was not recommended by sixth CPC.

The demand would be considered in view of parliament elections

Sunday, January 5, 2014

“There’s no dearth of money in this country, the only problem is that the money doesn’t reached the poor,” Rahul asserted.

“There’s no dearth of money in this country, the only problem is that the money doesn’t reached the poor,” Rahul asserted. 

Congress believes poor and rich should be taken along: Rahul Gandhi in MP

Calculation of Minimumwage & Minimum pay

Providing proper minimum wage of Rs 27000/- for CG Employees including that of GDS employees and 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”.

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/-

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 dependent 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.

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

ItemsPer day PCU (In grams)Per month 3CU (In kg)Price per kg. taken by 6th CPC (In Rs)Total cost as per rates of 6th CPC (in Rs) As on 1/1/2006Price per kg. as per prevailing market rates (in Rs) 1/6/13 At BangaloreTotal cost as per prevailing rates (in Rs) 1/6/2013
Dal (Toor/ Urad / moong807.24028880576
Raw Veg.1009.00109060600
Greenleaf Veg12511.2510112.540400
Other Veg.756.751067.545450
Milk200 Ml18 Lt.24.0043235630
Sugar and Jaggery565.0024.0012045225
Edible Oil403.650180100360
Detergents etc200200400400
Clothing5.5 Mt.80/Mt4402001100
Misc. @ 20%*8272660
Addl. Exp @ 25%**4003325
Housing @ 10%***148600^
Grand Total5478.517226

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/-.

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%.


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 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 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 + 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 4800= Rs 14100/- + allowances, that should have been actually Rs 6500 multiplied by 3.6 times which works out to Rs 23000/- .

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 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.