Friday, April 25, 2008

Bonanza backfires

Any political mileage the United Progressive Alliance (UPA) government had hoped to gain out of announcing the Sixth Central Pay Commission recommendations as a pre-poll bonanza has been neutralised, at least for the time being. Almost all sections of Central government employees are up in arms against the recommendations, which are apparently skewed in favour of the Indian Administrative Service (IAS). The government has now been forced to constitute a high-level committee to look into them and suggest corrective measures.

The committee, led by the Cabinet Secretary, will have as members Secretaries of Home, Defence, Revenue, Expenditure and the Department of Posts, the Secretary (Security), the Deputy Comptroller and Auditor General, the Financial Commissioner and the Member Secretary of the Railway Board.

The committee was announced following opposition from non-IAS Central government employees, including defence personnel and Indian Police Service (IPS) officers, to the recommendations. The discontent among the defence personnel was so grave that the Chiefs of the Army, the Navy and the Air Force intervened on behalf of their staff.

IPS officers – even chiefs of the police in the States – apparently planned a protest march from Vijay Chowk to North Block, the seat of the Home Ministry, in New Delhi. The discontent is simmering; officers up to the rank of Deputy Inspector-General (DIG) are said to be contemplating surrendering their medals if they do not get justice.

The "pro-IAS" stance of the Commission has left over 14 lakh railway employees, nearly five lakh defence personnel and over 12 lakh other Central government employees seething with rage. A joint consultative machinery (JCM) of these employees will meet in New Delhi on April 25 to chalk out a plan of protest action.

Significantly, defence personnel were among the first to voice their discontent. Though the Justice Srikrishna Commission has been generous with the three services chiefs – their salaries have been trebled and brought on a par with the topmost civilian salary of Rs.90,000 a month – its recommendations for middle-level officers and jawans have been inadequate. For instance, the increase in the salary for middle-level officers would only be 15-20 per cent as against 40 per cent, which they expected.

The special military pay recommended for jawans is Rs.1,000 a month whereas a junior officer would get six times that though both work in similar conditions on the border or in areas affected by terrorism and insurgency. To cite another instance, an Army havildar who draws Rs.11,000 after 15 years of service would get only Rs.13,000 to 14,000 a month after the revision.

At a time when joining the defence forces is not a preferred option for youngsters, it is feared that the Pay Commission recommendations will make it more unattractive. The Army is short of nearly 1,200 officers. The Navy and the Air Force, too, are beginning to feel the heat as many officers have applied for premature retirement. The three service chiefs, who met Defence Minister A.K. Antony shortly after the Pay Commission recommendations were announced, told the media that "there are some anomalies that need to be corrected".

Officers of the IPS are demanding parity with IAS officers at all levels in terms of pay, promotion, pension and service conditions; transparency in the implementation of the recommendations; and a Group of Ministers (GoM) to look into their grievances. Their fight is for "rightful respect and dignity" in view of their role in national security and development.

At a meeting of the IPS Association in New Delhi recently, where a resolution voicing these demands was adopted unanimously, it was also decided to constitute a media committee, a review committee and a legal committee to follow up the demands. "The legal recourse is open to us if nothing else will work. The report comes at a time when the police forces are already demotivated," said O.P. Singh, Inspector-General of the Central Reserve Police Force (CRPF) and a former secretary of the IPS (Central) Association.

According to him, what angers IPS officers most is the short shrift given to State Director Generals of Police (DGPs) and officers of the DIG rank.

While chiefs of paramilitary forces such as the CRPF, the Border Security Force (BSF), the Central Industrial Security Force (CISF), the Indo-Tibetan Border Police (ITBP) and the Sasashtra Sena Bal (SSB) have been given Rs.80,000 a month (fixed), State DGPs have been put in the pay band of Rs.39,200-Rs.67,000. In a memorandum submitted to Home Minister Shivraj Patil, the IPS Association says the "responsibilities and problems faced by Director-Generals of States are in no way less than those faced by the Central paramilitary forces" and hence the Pay Commission recommendations are "unfair and likely to violate the principle of equity and equitability between the services".

The IPS Association has also taken exception to the fact that its long-standing demand to upgrade the level of the post of DIG has not just been ignored, but the post has actually been downgraded from the previous pay scale of Rs.16,400-20,000 to Rs.15,600-39,100. The association has demanded that the DIGs' pay band be merged with the Rs.39,200-67,000 pay band.

The association also points out anomalies in grade pay allotted to IAS and IPS officers. For instance, the grade pay for senior time-scale for IPS officers has been fixed at Rs.6,100 as against Rs.6,500 for IAS officers, and the grade pay for junior administrative scale has been fixed at Rs.6,600 for IPS officers and Rs.7,500 for IAS officers. The selection grade scale for IPS officers is Rs.7,600; it is Rs.8,300 for IAS officers.

The Pay Commission has justified this discrimination in these words: "As the initial postings of IAS officers are generally in small places, they face frequent transfers, and the pulls and pressures they have to stand up to early in their career are much more intense. The slight edge in the initial stages of their career would, to an extent, neutralise these problems."

The IPS Association counters this argument by saying that "if the principle of postings in remote places, frequent transfers and pulls and pressures applies most to any service, it is the IPS. IPS officers need to be given the same grade pay exactly similar to the recommendations made for the IAS."

The IPS association has also demanded a hardship or risk allowance for the entire police force as it is more often engaged in arduous and difficult duties on internal security. It has also demanded a police service pay similar to the military service pay.

According to a senior police officer, at a time when the police forces are facing newer and harsher challenges on the internal security front, the government cannot afford to ignore them because a demotivated force can hardly "become a partner in development", as the Prime Minister would want it to be. "A force of 2.2 million, led by 3,200 IPS officers, cannot be sidelined by any government. It can do so at its own peril," said another officer.

Other sections of Central government employees, except defence personnel and railway employees, are also annoyed that two-thirds of them have been given a pittance by the Pay Commission. "Barring the top-level bureaucracy, that is Joint Secretary above, nobody has been given a fair deal," says K.K.N. Kutty, general secretary of the Confederation of Central Government Employees and Workers. According to him, the Fifth Pay Commission had recommended a better minimum pay in 1997 as it had taken the net national product into consideration, which this Pay Commission has ignored.

Kutty says the Sixth Pay Commission has given a 181 per cent hike to Grade A officers and just 28 per cent for the rest. "The disparity between Grade A officers and the rest has gone up tremendously. For example, there is no change in our transport allowance even though we travel in our own vehicles or by bus. But the transport allowance to an IAS officer has been hiked to Rs.7,000 a month, which is even higher than the minimum wage of an employee," he says.

Railway employees are particularly miffed at the lower-level staff being totally ignored by the Pay Commission. According to a spokesperson of the railway employees' union, the hike in the pay scales for Group D and Group C staff was only Rs.997 and Rs.1,537 respectively, while it is Rs.6,575 for Group B and Rs.6,160 for Group A employees. Officers at the level of Secretary and Cabinet Secretary would get a hike of Rs.31,640 and Rs.32,040 respectively.

With the joint consultative machinery planning direct action, the Sixth Pay Commission recommendations are turning out to be the proverbial albatross around the UPA government's neck. If the government implements them in their present form, it would antagonise a whole section of its employees. A review of the recommendations, on the other hand, will have massive financial implications.

The Pay Commission's liabilities are already estimated at Rs.12,561 crore in 2008-09. The net financial burden for the year would be Rs.7,975 crore after taking into consideration the savings of Rs.4,586 crore that are likely to accrue on account of the various measures suggested in the report. In addition to this will be the Rs.18,060 crore to be paid as arrears.

While the government may have worked out ways to meet this expenditure, as the Finance Minister announced in his Budget speech to the thumping of desks, it is doubtful whether it will be able to mobilise the additional resources if the Pay Commission recommendations are revised. No wonder, the high-level committee has been given no time frame to submit its report.

Tuesday, April 22, 2008

I want better pay for defence, civil services: PM

The armed forces need to be paid more. Prime Minister Manmohan Singh on Monday endorsed the demand of the services for better pay.

The Prime Minister has assured the military that it will get a better deal than that recommended by the Sixth Pay Commission.

"I would like our civil and defence services to be properly rewarded. I also believe that the tax payers will not grudge anyone of us better remuneration as long as we are serving the best interests of our people, most efficiently," Manmohan Singh said.

He made this comment while addressing top bureaucrats on Civil Services Day. The modest pay hike recommended by the Pay Commission has caused widespread disappointment in cantonments across the country.

He said that the Government has already set in motion a mechanism for hearing and redressing the grievances of the Government servants.

In the wake of the criticism over the recommendations, the government last week announced the setting up of a high-level official committee headed by Cabinet Secretary K M Chandrasekhar to process the report of the sixth Pay Commission.

There have been reports of over a hundred military officers having put in resignations after the Pay Commission submitted its report on March 24.

This is the first time that the political leadership has signaled that the Pay Commission report has failed to meet aspirations.

Wednesday, April 16, 2008

Central Govt employees to protest against Sixth Pay panel

The Confederation of Central Government Employees and Workers (CCGEW), Pune, has decided to protest against the report of the 6th Pay Commission as submitted by Justice Shrikrishna to the Government.

The issue will be discussed in the meeting of confederation's Pune branch to hold demonstration at District Collector's office on April 17 from 4.00 pm to 6.00 pm.

The protestors would be protesting against the adhoc and PLB bonus, which will be replaced by performance related incentive scheme; the women employees will be provided with staggering working hours, special leave for child care, maternity leave up to 180 days, increased working facilities like working women hostels etc.

Other areas, which have invited the attention of the protestors are the proposed rate of increment ie 25 per cent may bring about a dip in the quantum of the pre-revised increment in certain cases.

The demand for increment at 5 per cent of pay stands revised.

The increment in all cases will be effective from July 1. The government has been given the discretion to do away with the grade pay even in individual cases as part of introduction of performance related pay scheme.

The minimum wage/salary is fixed at Rs 5,740 and not at 6,600. The CCA is subsumed in the transport allowance and the transport allowance is increased by 4 times.

Central Government Health Scheme (CGHS) is replaced by medi-insurance.

The number of closed holidays has been reduced to three and restricted holidays have been increased to 8.

The commission also recommended abolition of Group D posts, which means elimination of 12 lakh posts in the central government services.

The sixth pay commission’s recommendation on wage/salary rise is grossly discriminatory against the employees category vis-à-vis the high level officer.

A large number of protestors from different walks of life are expected to particiapte in the protest.

Thursday, April 10, 2008

Pay Commission report draws flak from central govt employees

After army personnels and IPS officers, other government employees have now voiced their grievances against the Sixth Pay Commission report, saying the recommendations does not correspond to the increased cost of living but will increase inequality.

An association, representing gazetted officers of grade B and promotee officers of grade A in various departments of the Central Government, in a release today said the recommendations of Justice B N Srikrishna pay panel would increase the inequality in their grades.

"The minimum maximum ratio has been fixed at 1:15.7, which was only 1:11.8 at present. What is the justification for this?," the Confederation of Central Government Gazetted Officers Organisation said.

Besides, the minimum pay granted is Rs 5,740 as on January 1, 2006. This was approved after considering two increments of 2.5 per cent per annum for 2006 and 2007, which as on April 1, 2008 was Rs 6,031, the confederation said, adding, "this is much below the minimum wage in todays cost of living."

The confederation also alleged that the salary suggested by the panel increases at much higher rate with the hierarchy.

Pointing out that group B Officers are responsible for implementing all the governments policies, the confederation said they have been chosen to meet out the harshest treatment.

Confederation Secretary General Rajesh Menon said a memorandum carrying their grievances would be submitted to the Personnel Department later this month.

The confederation represents employees of ordinance factory, income tax, postal department, railways, customs, excise and other central government jobs.

Yesterday, the government has constituted a panel to look into grievances of armed forces and IPS officers.

Find out the arrear calculator based on Sixth Pay Commission report here -
Discuss the pay commission report at

Thursday, April 3, 2008

Pay Commission hike is only 13%

Media reports have talked of a ‘bonanza for babus’ in the shape of a 40% hike recommended by the Sixth Pay Commission (SPC). Many wonder whether government servants deserve such munificence. It is nothing of the kind. The pay hike recommended by the SPC is modest.

The correct way to estimate the average pay hike for central government servants is to see how much the government’s wage bill goes up. The SPC estimates the annual gross impact of its recommendations to be Rs 9,242 crore for the Union government (excluding the Railways). Pay, allowances and pension of the Union government amounted to Rs 68,290 crore in 2007-08. Hence the average increase in government compensation is 13.5%.

The increase at the highest level — Grade A — is much larger, around 30-40%. But grade A officers account for just 1% of the total strength of government employees, so the increases at the highest levels have little impact on average compensation. The increase in compensation for the vast majority of government servants will be in the range of 10-13%. Hardly the ‘bonanza’ the media has gone to town about.

Nobody needs to lose sleep over the fiscal impact of the SPC. The annual impact (including the Railways) amounts to Rs 12,561 crore. (This does not take into account possible savings of around Rs 4,600 crore). Arrears amounting to Rs 18,060 crore are to be paid over two years or about Rs 9,000 crore each year.

The fiscal impact on the Centre in 2008-09 is thus around Rs 21,000 crore — or about 0.4% of GDP. This will taper off and become negligible over the next three years or so. The impact on the states is not likely to exceed 0.5% of GDP either.

Compensation in central government as a proportion of revenue receipts has been falling over the years. It rose from 28% in 1996-97 to 38% in 1998-99 following the Fifth Pay Commission (FPC). It declined thereafter to an average of 24% in the period 2005-07. The decline of 14 percentage points in the ratio over the past decade means that government has effectively been downsized by over a third, as the FPC had recommended. It may not be downsizing by asking people to leave. But, in financial terms, it is indeed downsizing.

The SPC recommends annual increments of 2.5%. Add dearness allowance growth at 4.5%. Add another 2.5% towards increase in manpower. That gives us growth in compensation of 9.5%. Revenue receipts are growing at 17%. So the ratio of compensation to revenue will continue to decline in the years to come.

The SPC could have set a threshold for the compensation to revenue ratio. Once the ratio falls below the threshold by, say, 3%, that could be the trigger for an increase in compensation that would take the ratio back to the threshold. This would have ensured that wage revisions in government take place sooner than 10 years and contained the demoralisation in government created by runaway growth in private sector compensation.

Find out the arrear calculator based on Sixth Pay Commission report here -
Discuss the pay commission report at

Wednesday, April 2, 2008

CPI(M) urges Central government to reject pay panel proposals

The 19th Congress of the Communist Party of India (Marxist) called upon the Central government on Tuesday not to accept the Sixth Pay Commission's recommendations that pertained to the abolition of Group D posts and the corporatisation of the railways and defence production establishments.

Deliberations on the fourth day of the Congress expressed concern over the recommendation for the abolition of posts that would eliminate 12 lakh posts in the Central government service itself. This would mean contracting or outsourcing of regular jobs in various departments.

Salary rise recommendations were "grossly discriminatory" against employees in the departments, and also against the jawans and lower-level employees in the defence establishments.On the the recommendations on impacted wages/salaries of State government employees, the party Congress demanded that the Centre grant at least 50 per cent of the additional funds required for all the State governments.

For special category States in the North-East, it should be at least 90 per cent for consequential revision of wages/salaries for employees and teachers.

Find out the arrear calculator based on Sixth Pay Commission report here -
Discuss the pay commission report at

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