Principles of Determination of Pay and Minimum & Maximum Wages Submitted to 7th CPC by IRTSA

Presentation on Principle of Pay determination & Minimum and Maximum Pay – Compiled by Er. K.V. Ramesh, Senior JGS/IRTSA
Principles of Determination of Pay & Determination of Minimum & Maximum Wages Submitted to 7th CENTRAL PAY COMMISSION

Indian Railways Technical Supervisors Association (IRTSA)

M. SHANMUGAMHARCHANDAN SINGH
Central PresidentGeneral Secretary
Compiled by K.V.RAMESH, Senior JGS/IRTSA

Relevant Terms of reference
2.a) To examine, review, evolve and recommend changes that are desirable and feasible regarding the principles that should govern the emoluments structure including pay, allowances and other facilities / benefits, in cash or kind, having regard to rationalization and simplification therein as well as the specialized needs of various Departments, agencies and services, in respect of the following categories of employees:-
i. Central Government employees-industrial and non- industrial;
2.b)To examine, review, evolve and recommend changes that are desirable and feasible regarding principles that should govern the emoluments structure, concessions and facilities/benefits, in cash or kind …….

Article 43. Living wage, etc., for workers
The State shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and …..

Job Evaluation
Scientific job evaluation methods are available for a fair comparison of wages.
Difference in nature of work can well be taken care of in scientific job evaluation.
Recommendation of 3rd CPC for adoption of Job evolution technique on experimental basis is still not tried.
Classification or Grading method is easier method for job evaluation.

Proposed method for Job Evaluation
Brief Job descriptions and details of pay scales, emoluments and other particulars be collected for various group of Employees.
Jobs can be broadly grouped like “Industrial”, “Non-Industrial” and “Secretarial” etc.
These groups may be further broken up into various sub-groups like “Artisan”, “Supervisory”, “Administrative”, “Supportive”, etc.
Separate “Grade definitions” shall be finalised for each of these Groups & sub-groups,
Indicating, type of work, level of job difficulty, area & Span of Supervision, etc
Maintaining horizontal parities & vertical relativities.
Will results in better justice, better job satisfaction, greater industrial harmony leading to higher efficiency and productivity and the time, cost and effort would definitely be worth the returns, particularly in the long run

Minimum Wage as per 6th CPC method
Pay in Pay Band + Grade Pay + % DA + Compensation factor based on rise in NNP at factor Cost.
Calculation of compensation factor

YearPer Capita NNP at factor cost At constant priceIncrease over previous year
2005-06260151872
2006-07280672052
2007-08303322265
2008-09317541422
2009-10339012147
2010-11363422441
2011-12380371695
2012-13391681131
2013-14*410461878
2014-15*429241878
% Increase of NNP at factor cost on Constant Prices for the period of ten years65%
* Assumed figures as per average increase
Proposed Minimum Pay w.e.f. – 1.1.2016
Minimum Basic Pay + DA 140%+ Compensationfactor 65% of BP + DA
Minimum Basic pay after VI CPCRs.7000
Projected DA 140% (as on 1.1.2016)Rs.9800
BP+DARs.16800
Compensation factor (65%)Rs.10920
Proposed Minimum PayRs.27720 or Rs.28000
Proposed Number of times increase of BP3.96
Proposed Minimum & Maximum Pay based on post 6th CPC formula
EXISTING PAYPROPOSED PAY @ 3.96 TIMES (ROUNDED OFF) OF EXISTING PAY
MinimumMaximumMinimumMaximum
Pay in Pay BandGrade PayPay in Pay BandGrade Pay
Rs.5200Rs.1800Rs.80,000Rs.20,800Rs.7200Rs.3,20,000
Minimum Pay shall be increased from Rs.7000 to Rs.28,000. 

Maximum Pay Shall be increased from Rs.80,000 to 3,20,000.

Intermediate Pays shall be fixed in the same way.

Upgradation shall be granted to specific categories on functional & other related justification.

Determination of Maximum Pay First & then arriving Minimum Pay in the ratio of 9:1
Maximum Pay shall be fixed first as per rise of NNP and then the Minimum pay in the ratio of 9:1thereof and the Intermediate Pays shall be fixed.

Maximum Pay = Rs.80,000 x Compensation factor based on rise in NNP at factor Cost. = 80000 x 3.96 = Rs.316800 or Rs.3,20,000.

Therefore, Minimum Pay works out to be Rs.320000 / 9 = 35555 or Rs.35500.

Rate of Increments
Annual Increment:- Rate of annual increment in each grade may please be granted @ 5 per cent.
Increment on Promotion:- During Promotion minimum 10% increase in Basic Pay has to be granted.
Fixation of Pay on Promotion at par with Entry Pay:- Pay on Promotion should be fixed at least at par with Entry Pay in the Revised Pay Structure.
Thank you
Source: IRTSA
[http://www.irtsa.net/pdfdocs/7th_CPC_Principle_of_Pay_Determination.pdf]

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