SIXTH CENTRAL PAY COMMISSION

Response of All India Customs Preventive Service Federation

4. Salaries

4.1 How should we determine the salary to be paid to a Secretary in the Central Government? Please suggest an appropriate basic pay for a Secretary? Can appointment to this post be made on a contractual basis where salaries and tenure are linked to the performance in terms of achieving defined targets?

Ans. Remuneration and other facilities applicable to CEOs of Navaratna Public Sector Organisations can be a yardstick for determining the pay structure of a Secretary in the Central Government.

Appropriate basic pay for a Principal Secretary can be Rs.1,50,000/- and that of Secretary can be Rs.1,25,000/-. Consideration such as accountability, national security and desired commitment, will impede the idea of appointing Secretary, the top most executive of Govt. on a contractual basis. Further, linking their salary and tenure to the results, is fraught with the risk of nepotism.

Lastly, it needs to be remembered that a Secretary is not the only official of the Government. He is one among the many, who are all Public Servants with their assigned duties and responsibilities.

4.2 What should be the reasonable ratio between the minimum and the maximum of a pay scale?

Ans.

In one pay scale
At present the increments in different pay scales range between 2.15% to 3.44% with reference to minimum of the respective scale, the average of which comes to 2.83%. We strongly feel that this reward is "far too low for the toils one put throughout the year. Hence, there should be no maximum in a Pay Scale. Minimum pay can be fixed for each scale and then it can be kept open ended with annual increment @ 5% of the pay drawn in the earlier year.

In the pay scales as a whole
This is generally referred to as the disparity ratio, which is detailed in 4.3 below.

Concept of Minimum Pay

A) Our first Prime Minister, Pandit Jawaharlal Nehruji, on the eve of AITUC Conference in 1929 had promised the Govt. Employees 'Living wages' (as against minimum wages) after independence and had criticized the then existing pay scales in the British Regime, which according to him was responsible for the bad condition of Central Govt. Employees. The promise is yet to see the light of the day.

B) Even the promise to set up a pay commission every Ten years has not been kept by the Government. The delay has resulted in skipping of one tenure resulting in heavy loss to Govt. Employees vis-a-vis public sector.

C) The data of dietary intake, world over, states clearly indicates that the need per unit is 3000 calories. But unfortunately in our country, it is taken as 2700 calories. Due to modernization, pollution, our food habits and climate, necessitates require extra calories. Therefore 3300 calories per unit is appropriate.

D) The present pay structure is arrived at taking into consideration the western style of family which normally comprises of three units. In India there are six members in a family i.e. self, spouse, two children, parents. This is confirmed by sample survey conducted by Shram Seve Dnyas. Now the expenses towards children have increased manifold due to steep hike towards costs of education. Eg. Fee for Engineering in 1996-97 was Rs.4000/- which now is approximately 49,000/- i.e. a hike of 12 times. Similarly, fees for medicine have gone up from Rs.6000/- to Rs.1.25 lakhs i.e. a hike of about 20 times. Besides, as per the recent decision of Delhi High Court, maintenance of parents has been declared as the responsibility of adult and earning children. Therefore the old system of taking a family as comprising of 3 units, one unit for the male, 0.8 unit for the female and 0.6, unit for each child is now totally outdated. Now, one family needs to be taken as consisting of six units, one each for husband & wife, two units for children and two units for parents.

E) As per Bombay Furlough & Parole rules 1959 - Govt. spends a minimum of Rs.1616/- P.M. on the food of a Prisoner as per prevailing market rates.

Sr.No. Commodities Quantity (Gms) Market Rates
1. Rice 150.00 04.00
2.* Flour 550.00 10.00
3. Jowar Atta 550.00 12.00
4.* Bajra Atta 550.00 12.00
5. Chana Dal 120.00 06.00
6. besan 030.00 02.00
7. Sweet Oil 025.00 3.00-2.50
8. Salt 012.00 0.10-0.10
9. Imli 005.00 0.25-0.20
10. Jeera 000.25 0.10-0.07
11. Heeng 000.25 2.00-1.50
12. Haldi 005.50 0.90-0.75
13. Dhania 000.75 0.25-0.20
14. Lahsun 000.75 0.15-0.10
15. Methi 000.75 0.15-0.10
16. Rai 005.75 0.90-0.75
17. Mirchi 006.00 0.95-0.85
18. Sugar 020.00 0.50-0.45
19. Tea Leaves 005.00 1.20-1.00
20. Rava 060.00 1.50-1.30
21. Jaggri 040.00 1.20-1.00
22. Vanaspati 020.00 2.50-2.30
23. Poha 060.00 1.70-1.50
24. Onion 010.00 0.25-0.20
25. Vegetable 225.00 5.00-4.00
26. Green Chilli 0.50-0.30
27. Ginger 0.60-0.50
28. Hara Dhania 0.20-0.15
29. Kari Patta 0.05-0.05
30. Shakkarand 2.00-1.70
31. Banana 100.00 2.50-2.00
32. Kerosene 0.90-0.90
33. Milk 150 ml. 4.50-4.40
34. Fuel Wood 1.20-1.00
Total 59.05-53.87

* Not accounted for in total.

Minimum Monthly Expenses - 53.87 x 30 = Rs.1,616.10
Taking into account the other needs of a Govt. Employee, like clothing, shelter, transport, education, health/medical expenses, a factor of 2 may be adopted for calculating the minimum pay. Taking the family size of six consumption units as brought out in para 'D', Minimum pay works out to:
Rs. 1616 x 2 x 6 = Rs.19,392/-, say Rs. 19,000/- P.M.

F) Principle of Gold Prices:
Consumer Price Index is scientifically linked with the prices of gold. The 2nd C.P.C fixed minimum pay at Rs.80/-, when price for 10 gms. of Gold was Rs. 88/-. 3rd C.P.C fixed the minimum pay at RS.196/- when the price for 10 gms. Gold as Rs.243.50. Thus, these two C.P.Cs bestowed upon Central Government employees purchasing power worth 8 gms. of Gold. Today the price of gold is Rs.9200/-(approx) for 10 gms. Accordingly, the minimum pay should be Rs.7400/- (equivalent to 8 gms. of gold) for a family of 3 consumption units. But, for a family of 6 consumption units it works out to Rs.14,800/-, rounded off to Rs. 15,000/- P.M.

From paras 'D' 'E' & 'F', we can concur on a minimum Basic Pay of Rs. 15,000/- in the lowest of the scale, for Government Servant.

4.3 Is it necessary to persist with a pre-determined minimum-maximum ratio on ideological considerations? Or is it more important to ensure efficient administration by preventing flight of outstanding talent from Government?

Ans. Minimum-Maximum or disparity Ratio, if at all adopted, must not only be based on ideological considerations. On the contrary, there is strong evidence for the same to be based on factors such as work responsibility and required level of competence for the same. Following the socialistic ideology, the disparity ratio was steadily brought down from 1:54.5 in 1948 to 1:8 in 1996. The 5th C.P.C pegged the same at 1:10.7. But with the recent policy of liberalization and globalization, goal of being market driven has also gained additional prominence, which calls for an upward revision of this ratio (Source: Article in Economic Times of 27/07/06 titled Sixth Pay Commission is no ogre, by T.T.RAM MOHAN, Professor at IIM, Ahmedabad) Hence, on an overall analysis, a disparity ration of 1:13 to 1:15 would be ideal.

Along with retaining, attracting new and better talents to the Govt. service is vital for ensuring an efficient administration, which alone can guarantee good governance. But economic disparity and I or insecurity will cause a feeling of being slighted amongst the Govt. Employees vis-a-vis other sections of the society, adversely affecting their morale and in turn their performance, which do not forebode well for the Country's well being.

Therefore, in the first place there should be no room for any sort of pre-determined minimum-maximum ratio, while deciding on the pay related issues for Govt. Employees. But, if the same is to be used for whatsoever reason, then the same should be at the enhanced ratio of 1:13 to 1:15.

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