7th Pay Commission Report : Employees’ Expectations versus Disappointments

7th Pay Commission Report : Employees’ Expectations versus Disappointments

“7th Pay Commission Report – From the perspectives of various employees and employees’ unions”

On November 19, the 7th Central Pay Commission submitted its report on the salaries, pensions, and benefits for more than 50 lakh Central Government employees.

Within hours, the websites and news media began to give their elaborate interpretations and opinions about the recommendations. Mr. Krishnan, the secretary of Confederation of Central Government Employees & Workers, on his website, gave a scathing review of the report, listing out all the drawbacks and disappointments. This was followed by similar opinions from almost all the other employees associations.

Employees’ expectations versus disappointments

Minimum wages : NCJCM demanded that the minimum wages be raised to Rs.26,000. Reports said earlier that the numbers range from Rs.24,000 to 21,000. But, the Pay Commission had fixed it as Rs.18,000. Criticism about the minimum wages that are going to be enforced for the next ten years is the great disappointment.

House Rent Allowance : House Rent Allowances have been brought down from the current 10, 20 and 30 percent to eight, 16, and 24 percent. NC JCM had asked for an increase to 20, 40, and 60 percent. Popular opinion says that even if the idea of increasing HRA was unacceptable, the commission didn’t have to reduce it.

Date of increment: There was disappointment because the report didn’t say anything about adding the date of increments, such as January 1 and July 1.

Date of implementation : NC JCM demanded that the new recommendations be implemented with effect from 01.01.2014, but the commission has prescribed 01.01.2016 as the date of implementation.

Multiplication Factor : The 6th Pay Commission recommended that the Grade Pay be calculated at 40 percent from the higher pay band and a Multiplication Factor of 1.86 be used on it. The 7th Pay Commission had recommended only 2.57 and has completely removed the Grade Pay structure. The NC JCM had insisted that it be fixed at 3.7.

Promotion and Increment : The Pay Matrix table was prepared only with 3 percent increment. Everybody expected in the benefit of promotion, there will be two increments or a 5 percent hike. The 7th Pay Commission instead made no changes to this. The employees are also disappointed that promotions are not likely to bring in a noticeable financial improvement. The Grade Pay hike, which was implemented in the 6th Pay Commission, has now been removed.

MACP Promotion Scheme : Four or five promotions were expected under the much-awaited MACP scheme. But the new report recommends the same 10, 20, and 30 years routine, with stricter guidelines for promotions. This could lead to complications for those who weren’t given any promotions for more than 10 years, to get one through the MACP upgradation.

Allowances and advances : The Pay Commission has recommended the abolishing of about 52 allowances, including the “Family Planning Allowances.” It has also recommended the abolishing of all kinds of advances, including the LTC advance.

And also disappointed in the topics of New Pension Scheme, LTC, Transport Allowance, Children Education Allowance, CGEGIS, Fixed Medical Allowance and GDS Issues.

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3 thoughts on “7th Pay Commission Report : Employees’ Expectations versus Disappointments”

  1. 7 CPC has done proper justice to all central govt. employees by giving an increase of 32% to 56% for the lower ranked person to the secretary level officer. (2.57 – 2.25 = 32% for lowest rank and 2.81 – 2.25 = 56% for the secretary level officer). During 6 CPC the new pay scale was arrived at by giving 1.86 multiple factors whereas it is now 2.57. DA as on 1.1.2006 was nil. Similarly DA as on 1.1.2016 will also be nil. Before all central govt. employees get into the agitation mode, please think about your poor cousins working in private, banking industries, and other unorganised sectors where salary and perks are much less than the central govt. So be happy and contended,

    The true pictures of the 7 CPC recommendations are as given below:-

    1.Dearness Allowance – The quantum of D.A. amount receivable on account of revision of pay scale will be much higher as the DA calculation formula has not been changed.

    2.House Rent Allowance – Though the varying rates of HRA have been reduced from 30%,20%,10% to 24%,16%,8% respectively it is no way going to put the employees in any state of disadvantage. For example a person with 7000 salary(B.P. + G.P) in the existing scale will get 2100 HRA @30% and the same person in the changed scenario will get 4320 (18000 @ 24% = 4320). It can be seen that new HRA is more than double the amount. Therefore I am not able to understand the further demands of the employees on the subject.

    3.Transportation Allowances – The rates have been doubled

    4.Annual increment – I think retaining 3% increment is okay because employees are going to get the benefit on the revised scale which is minimum of 2.57 times higher than the existing scale.
    Children education allowance/Hostel subsidy – Hike by 25% to Rs. 2250

    5.Child care leave – Recommended for single male parent also. A total of 730 days permitted with 80% salary which is a welcome step by 7 CPC for the benefit of the employees.

    6.House building advance – Enhance from 7.5 lakhs to 25 lakhs which is an excellent recommendation
    7.Group Insurane scheme – Group Insurance Limit has been enhanced to 50, 25, and 15 lakhs. This will provide great financial support to the bereaved family in case of death in harness. This recommendation is in the right direction for providing financial help to the family
    8. Retirement Benefits – (a) Employees will get better pension. (b) The gratuity limit has been doubled. Here one can argue that it is going to benefit only senior officers and I think the argument is not out of placed. (c)Because of hike in pay scale all employees will get handsome amount on account of commutation of pension at the time of retirement. (d) Leave encashment – The quantum of amount of leave encashment will also be higher on account of revision of pay. There will 60 to 65% increases in the overall take home retirement benefits.

    There are some flaws in the 7 CPC. Only one problem that needs to be addressed is the fixation formula recommended on promotion from one rank to the higher rank. 7 CPC has recommended only 3% increase which leads to lower financial benefits than the existing benefits. Therefore the percentage of increase on promotion is to be hiked to at least 5% to derive some monetary benefit on promotion.

    Except for the flaw on fixation of pay on promotion which needs to corrected, the overall recommendation of 7 CPC are beneficial to the employees and therefore there should not be any sort agitation on the recommendations. The compression ratio is required to be narrowed to the ratio of 1:10 or at the most 11 and not more. At present it is 1:12.5 (2.25 lakhs for secretary’s pay divided by 18000 last grade pay = 12.5 times). This is my personal views.

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