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08-04-2008
Author: Forwarded by Shri. M.P. Vasudeven, Supdt of Customs, Mumbai
Article:Why Low End Bureaucracy Has a Genuine Grouse Against Pay Panel The Range of Percentage Increases Proposed in Basic Salary Plus Dearness Allowance Reflects Inequity
Date:Friday, March 28, 2008
Pay bands proposed for groups with increases less than 50%, may be raised to 100%. That means the level of pay in 1996 is doubled in 2006, or an annual increase of a modest 8%.
THE Sixth Central Pay Commission (SCPC) delivered a Holi bonanza costing the Central exchequer Rs 18,060 crore in 2008-09 and Rs 12,561 crore in subsequent years. If the Commission's recommendations are accepted, 2.15% of the Central Budget would go to babus as additional emoluments. How is the distribution of this expenditure among different scales of pay? Initial analysis suggests that persons at the lower end of the bureaucracy have lost out. Here is how.
The factors impacting the government's 'capacity to pay' include positive factors, like the growth of the Indian economy and buoyant revenues and also negative factors, like the need for fiscal deficit to stay within the FRBM parameters and the high rate of inflation. Neither of the factors offers any rationale for differential rates of increase across scales of pay. What then explains differences - absolute, rates and percentages of increase - in different scales of pay? To start with, the differences in increases are detailed in the table.
Prima facie scrutiny suggests a range of increase from Rs 35,550 at the top end of Cabinet Secretary to Rs 1,474 at the lowest end for an LDC, at the maximum of his existing scale of pay of Rs 2,750 – 70 - 3,800 – 75 - 4,400. Equity in absolute terms is not appropriate for comparison of the proposed pay increases. The increase of 24 times at the higher end of the range in relation to that at the lower end is, however, too sharp to be ignored.
In case of pay increases, it would be appropriate to take percentage increases, which are given in Column 6 of the table. Minimal analysis suggests that the range of percentage increases in basic salary plus dearness allowance reflects inequity. In fact, there is a distinct pattern, Orwellian in nature, "where some men are more equal." Increases of more than 100% are proposed for Cabinet Secretary, Secretary and minimum of the Joint-Secretary scale (rows A, B and F). Increases between 50% and 100% are proposed mainly in PB-4, i.e. Additional Secretary and Joint Secretary (rows C, D and E). One exception of an increase which is higher than 50% is the entry point of Group A (Row J), on account of the recommendation of the SCPC for a higher starting salary to Group A.
All other increases are less than 50%. These are for pay bands PB-1, PB-2 and PB-3 and cover posts of LDC, Assistant, Section Officer and Directors. Higher percentage increases above a cut-off level when compared to those below that level are dearly discriminatory, not followed in earlier pay commissions and not determined by either of the two principles listed in the SCPC and detailed earlier. Variations as detailed above cannot be classified in the permissible statistical error range of 1- 5% and clearly need to be rectified.
The SCPC, in the proposed revision, included the existing basic pay and dearness allowance that would have been drawn as of January 1, 2006. The actual dearness allowance that was drawn on January 2006 had two components, first 50% that was merged as dearness pay, and the second of 21%, paid as dearness allowance. As against the 21%, the SCPC included 24% (21+3). The 3% additional dearness allowance was released in March 2006 and made payable with effect from January 1 2006. The SCPC ignored the 50% dearness pay that officials were in receipt as of January 1, 2006. To start with, the base adopted by the SCPC was lower by 50%.
Earlier pay commissions followed the principle of summing up all existing emoluments (basic pay, dearness pay, interim relief, dearness allowance) and marking up the same by a uniform percentage (ranging between 20% to 40% of the basic pay) for all levels. The SCPC has not adopted the same and has replaced it with fitment tables, according to which there is no minimum guaranteed percentage increase. The percentage of increases steeps as one climbs the hierarchy.
In the case of rows G to K, there is a decline from the existing emoluments, which is compensated by the newly introduced grade pay. In the absence of grade pay, status of which is not clear, these groups would have a decrease in their emoluments. There is a need to amend rules to ensure that grade pay would be included in the computation of all allowances, otherwise the groups could be net losers, even at the start.
The available option is to redraw the pay bands for groups with increases less than 50% and to raise it to a minimum of 100%. This does not mean that salaries would double. It only implies that the level of pay in the year 1996 is doubled in 2006. Statistically this implies an annual increase of around 8%, a rate at which the Indian economy has been growing in recent years.
Rohit Kumar Parmar
(The author is in Indian Economic Service - The views are personal)
PAYBACK TIME
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Scale of Pay
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Total Emoluments
as on 1.1.2006*
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Proposed Revised
Scale
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Pay Band
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Proposed Revised
Basic**
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Absolute Increase#
(Col 4 - col 2)
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% Increase^
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1
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2
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3
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4
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5
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6
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A
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30000
(Cabinet Secretary)
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54450
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90000 (Fixed)
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Cab. Sec./ Equ.
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90000
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35550
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118.5
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B
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26000
(Secretary)
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47190
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80000 (Fixed)
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Apex Scale
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80000
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32810
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126.0
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C
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24500
(Max. Addl. Secretary)
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44467
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39200-67000
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PB-4
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65090
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20623
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84.2
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D
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22400
(Min. Addl. Secretary)
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40656
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39200-67000
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PB-4
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59990
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19334
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86.3
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E
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22400
(Max. Joint Secretary)
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40656
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39200-67000
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PB-4
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57990
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17334
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77.4
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F
|
18400
(Min. Joint Secretary)
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33396
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39200-67000
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PB-4
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52280
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18884
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102.6
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G
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18300
(Max. Director)
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33214
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15600-39100
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PB-3
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39450
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6236
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34.1
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H
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16700
(Specific Director)
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30310
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15600-39100
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PB-3
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36660
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6350
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38.0
|
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I
|
14300
(Min. Director)
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25954
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15600-39100
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PB-3
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32490
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6536
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45.7
|
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J
|
8000
(Entry Group A)
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14520
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15600-39100
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PB-3
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21000
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6480
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81.0
|
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K
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10500
(Max. Section Officer)
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19057
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8700-34800
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PB-2
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22470
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3413
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32.5
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L
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8000
(Max. Assistant)
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14520
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8700-34800
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PB-2
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18120
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3600
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45.0
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M
|
4400
(Max. LDC)
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7986
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4860-20200
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PB-1
|
9460
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1474
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33.5
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Notes: 1. There may be some marginal differences because of rounding off. 2. * Worked out on the basic pay, dearness pay, dearness allowance @ 21 per cent), which was actually paid on 1st January 2006. 3. ^ Includes Grade Pay, where applicable, a new concept introduced by SCPC. Grade Pay is Rs 11000 for C and D, Rs 9000 for E and F, Rs 7600 for G, H and I, Rs 5400 for J, Rs 4200 for K and L and Rs 1800 for M. 4. # Excludes increase on account of HRA and other applicable allowances. 5. ** Calculated as increase on the existing basic pay given in Col 1
The Economic Times, Mumbai - 28-03-2008
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29-10-2007
Author: Shri. G. Jayaprakash, Superintendent, Trivandrum
Article:Articles of Shri. G. Jayaprakash, Superintendent
List of Articles published by G. Jayaprakash, Superintendent
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