Published On: Mon, Nov 13th, 2017

7th Pay Commission: Raising minimum pay seems best anti-poverty option

New Delhi: With all the talk of raising minimum pay of central government employees, supporters and opponents ought to pause for a bit and reflect on one reality:

FM Arun Jaitley bemoaned the fact that the pay gap between the minimum and maximum 1:14 of 7th Pay Commission wass below the 6th Pay Commission, that was 1:12.

FM Arun Jaitley bemoaned the fact that the pay gap between the minimum and maximum 1:14 of 7th Pay Commission was below the 6th Pay Commission, that was 1:12.

For all the rhetoric, it’s still not clear in economic terms what the overall effect of a minimum pay increase will be, particularly on the Indian economy.

Minimum pay is much to low to support an entire family. It is nearly impossible for the employees to pay bills, buy groceries and clothes, etc…But if it was raised to, say, Rs. 21,000 per month the average family of four members could pay their bills with out trouble as well as buy life sustaining supplies.

The Finance minister Arun Jaitley had earlier said, “The minimum pay Rs 18,000 was made on recommendations of the 7th Pay Commission but government will consider hiking it after discussions with all stakeholders.”

Jaitley, when he had met representatives of several central government employees’ unions in home minister’s house with other two cabinet ministers—Rajnath Singh and Suresh Prabhu, endorsed the his idea and bemoaned the fact that the pay gap between the minimum and maximum 1:14 of 7th Pay Commission was below the 6th Pay Commission, that was 1:12.

All pay commissions except 7th Pay Commission made up pay gap between lower paid employees and top officers from second Pay Commission 1:41 ratio to Sixth pay commission 1:12.

The first pay commission was recommended pay of the top bureaucrats 41 times higher than the government employees at the bottom. The top bureaucrats were given salary Rs 2,263 while the lowest earning employees got Rs 55.

Subsequent pay commissions reduced the ratio of pay between lowest earning employees and top bureaucrats from 1:41 in 1947 to about 1:12 in 2006.

According to promise, Jaitley has formed National Anomaly Committee (NAC) in September, 2016, to look into the pay irregularities arising out of the 7th Pay Commission’s recommendations.

The Finance Ministry sources said that the NAC will agree to hike minimum pay from current Rs 18,000 per month to Rs 21,000 per month with fitment factor 3.00 from the existing 2.57 and the Union Cabinet is likely to seal it.

However, the cabinet will bypass the NAC any proposal, If they propose to give arrears of hike in pay.

The central government employees unions have been demanding minimum pay Rs 18,000 to Rs 26,000 with arrears from January, 2016 and asked to raise fitment factor 3.68 times from 2.57 times.

The Finance Ministry sources also added proposal of hike in minimum pay will be effected from April’ 2017.

Earlier, the government gave nod the 7th Pay Commission proposal of minimum basic pay from Rs 7,000 to Rs 18,000 per month while the maximum basic pay from Rs 80,000 to Rs 2.5 lakh with a fitment factor of 2.57 times uniformly of sixth pay commission’s basic pay.

TST

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