Published On: Fri, Dec 22nd, 2017

7th Pay Commission: Minimum pay value falling but fairness debated

New Delhi: The central government employees’ minimum pay has been below what’s needed to keep a family of four out of poverty since 2016. It’s also well shy of the peak of its buying power almost one-fourth of ten years ago.

Minimum pay hike depends on the political slant of the FM Arun Jaitley.

Minimum pay hike depends on the political slant of the FM Arun Jaitley.

Is the current Rs. 18,000 per month minimum pay fair? Is now the time to raise it, and if so, by how much?

There is no objective answer. It depends on the political slant of the Finance Minister Arun Jaitley or the views of Committee of Secretaries looking into pay anomalies, being asked.

The central government employees’unions claim that the 7th Pay Commission recommended pay hike is the lowest in the last 70 years.It shows erosion over time in the plight of minimum pay earners of the central government employees, but that reflects what the BJP led Modi government has produced, not necessarily what’s fair.

The unions had threatened to go on an indefinite strike on July 11, 2016. They had called off their indefinite strike after the government announced that a High Level Committee would be formed to address their demands.

Finance Minister Arun Jaitley had earlier agreed to resolve the problems of minimum pay hike of central government employees on June 30, 2016, a day after the Cabinet cleared the 7th Pay Commission recommendations, when the unions leaders had met and they had requested that issues raised by them regarding pay scales and and fitment factor be allowed to be raised before a Committee of Secretaries looking into different aspects of grievances of employees.

So, the 22-member National Anomaly Committee (NAC) has been formed in September, 2016 instead of High Level Committee to look into pay anomalies arising out of the implementation of the 7th Pay Commission’s recommendations.

The Department of Personnel and Training (DoPT) issued a letter on October 30 now stating that the demand for increase in minimum Pay and fitment formula do not appear to be treated as anomaly, therefore, these do not come under the purview of the NAC.

However, Finance Minister Arun Jaitley had said in Rajya Sabha on July 19, 2016, “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, once the proposal in this regard will be submitted to government.”

So, the unions are preparing to force the government increasing today’s minimum pay to Rs. 26,000 from Rs. 18,000, an effort that seems likely to fail in Committee of Secretaries but the unions hope for hike in minimum pay Rs 21,000 from Rs 18,000 and the existing 2.57 fitment factor to be raised to 3.00. The government generally oppose the proposal, saying it would cost too much in exchequer.

A leader of unions says the aim should be to boost low-paid central government employees and their families over the poverty line and the minimum pay should be fixed Rs. 26,000 instead of Rs 18,000 with 3.68 fitment factor.

He also says the pay gap between the maximum pay Rs. 2,50,000 and the minimum pay Rs. 18,000 in the 7th Pay Commission recommendations is 1:14, which was 1:12 in the 6th pay scale.

Country’s top economic experts say the hike in minimum pay will make a new financial crisis, so the government should keep the minimum pay hike in abeyance as our current account deficit (CAD) in July-September widened to 1.2% of gross domestic product (GDP), or $7.2 billion as against 0.6% or $3.4 billion in the same period a year ago, according to reports.

Earlier, the government hiked the salaries for the central government employees from August 2016. They also got arrears from January 2016 on the recommendations of the 7th Pay Commission.


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