RATIONALE BEHIND DEMAND FOR 7TH CENTRAL PAY COMMISSION

Due to no response from the Central Govt. to the proposal for a fruitful discussion on a 15-point charter of demands which includes revision of wages from January 01, 2011 by setting up of 7th Central Pay Commission(CPC) and Merger of 50% DA with Pay submitted to the Prime Minister   by the  Confederation of Central Government Employees and Workers on July 26, the latter had a one-day’s all India strike on December 12. A 48 hour strike is planned this month

The Confederation’s affiliated federations/unions/associations are organizing a country wide campaign to make the agitation a success. In this context, it is quite relevant to discuss the justification of formation of 7th CPC .

Emphasizing on the idea of “living wages” to the employees, the First Pay Commission was constituted in May, 1946 under the chairmanship of Srinivasa Varadachariar. The commission basically recommended that the lowest rung employee should at least get minimum wages. The Second Pay Commission set up in August ,1957 under the chairmanship of  Shri Jagannath Das  recommended that the pay structure and the working conditions of the government employee should be crafted in a way so as to ensure efficient functioning of the system by recruiting persons with a minimum qualification. Under the chairmanship of Raghubir Dayal, the Third Pay Commission set up in April 1970 gave its report in March 1973 adding three very important concepts of inclusiveness, comprehensibility and adequacy for pay structure and going beyond the idea of minimum subsistence. Constituted in June 1983, the Fourth Pay Commission submitted its report in three phases within four years under the chairmanship of P N Singhal. The Fifth Pay Commission was set up in 1994 under the chairmanship of  Justice S. Ratnavel Pandian recommended  to slash government work force by about 30% and   not to fill about 3,50,000 vacant position in the government departments which could not be implemented due to serious protest by the Confederation.

In July 2006, the Cabinet approved setting up of the Sixth Pay Commission which was set up under the chairmanship of Justice B N Srikrishna which submitted its recommendations to the Govt. on March 23, 2008.  The existing wage structure revised by 6th  CPC and implemented from January 1, 2006 is not only  anomalous but also totally irrational and inadequate. It is anomalous because by giving a system of Pay Band and Grade Pay, it restricted the pay scales to 20 under four Pay Bands ( PB-1, PB-2, PB-3 & PB-4).  There is no scientific determination of fitment benefit.  For one, who is at the minimum or lower stage will get a higher benefit and one who is at the higher stage in the pre-revised pay scale will get lesser benefit. The existing wage structure is also irrational because it is not based upon any principle of wage determination like need based minimum norms or fair comparison with outside rates which is universally applicable in all the other countries of the world. The wage structure given by 6th  CPC has totally smashed the existing relativities. The lowest minimum wage has not been fixed for unskilled worker. It has been fixed at the level of skilled worker, who is a matriculate. Such a wage structure is not acceptable to the people of India because a large number of rural youth who do not acquire the matriculation are languishing in the employment market. The existing relativity between unskilled and skilled worker was 50%. But the recommendations of 6th CPC reduced  it to 20%. General recommendation regarding Pay Band is that it should be 1.86 multiple of the existing pre-revised minimum so that it represents the existing Pay and Allowances as admissible on January 1, 2006. The Central Government  however, has given higher multiple of three times of pre-revised minimum in PB 4 without offering any explanation for this unrelated increase. The demand of the employees that at least 2.625 times of the existing wages may be uniformly provided, if not three times, which has not been accepted by the Government.  The 5th CPC has revised the entire wage structure by applying a common multiple of 3.25. Such a common multiplying factor has not been provided by the 6th CPC. Therefore, it has recommended a wage structure which gives inflated benefit to Group A Officer and very reduced and inadequate benefit to the rest of the employees.

Another important aspect of pay revision is  the merger of DA as Dearness Pay. Way back in 1962, when the 2nd  CPC had not given any formula for DA and the Government had imposed a very retrograde D A formula  by not providing 100% neutralization, the Confederation has raised a demand for indexing of the wages annually as is being done in other countries like Great Britain.  The Gadgil Committee appointed by the Government recommended for the merger of total  D A with Pay for the purposes of pension. The Third CPC, then had recommended that as soon as the Cost of living Index crosses 272 points, the DA then admissible should be merged with pay for the purpose of pension.

Later on, the employees’ organizations further negotiated and obtained merger of DA up to 320 points, not only for the purpose of Pension but also, for the purpose of Pay and Allowances.

The next merger of DA up to 468 points (148% of D A ) was done by Government before appointing the 4th  CPC. Employees Organizations then demanded that the system of merger should be regulated and should happen automatically as and when the DA increased by 50%. The Government  then negotiated a settlement by merging 20% DA and referring the rest of DA merger to the 5th  CPC and conceding all other demands. The 5th  CPC merged 98% DA which was then admissible and recommended that as and when the DA increase of 50% takes place, it should be merged with the Pay. Thus, the Central Govt. employees achieved a well regulated merger of DA with pay as and when it is increased by 50%. But, the 6th CPC has undone this achievement. Therefore,   continuation of the system of merger which has been recommended by the 5th  CPC and accepted by the Government should continue.

The most important reason to demand for appointing 7th CPC effective from January 1, 2011 is that while the wage revision in all the Public Sector Undertakings and in other Sectors usually takes place every 5th year, the same for the Central Govt. employees has been fixed for 10 years which is unconstitutional. The next revision in the Public Sector Undertakings is due from January 1, 2012, the last being with effect from January 1, 2007. Thus, question arises as to why should Central Government employees have to wait for a longer period of 10 years before the next revision becomes due? It is on this consideration that the Confederation of Central Government Employees and Workers has demanded the setting up of 7th  Central Pay Commission immediately to revise the wage structure