Seventh Central Pay Commission,
Sub: Memorandum to VII CPC on merger of DA with Pay and Interim Relief
Encl: As above
ON MERGER OF DA WITH PAY AND INTERIM RELIEF.
MERGER OF DA WITH PAY:
“Taking in to consideration the rates of dearness allowance that have been sanctioned to date for Central Govt. servents, and the level at which cost of living index are likely to stabilize in the foreseable future, to recommend the percentage of dearness allowance now given to the Central Govt. servents which should be allowed to be treated as pay for all purposes in future, provided that by doing so the present total pay and dearness allowance is not enhanced:”
“We have recorded the various reasons which we have taken into account in arriving at the conclusion that the appropriate level below which the All India cost of living index is not likely to fall, should be taken as 265-284. We find that for the index figure of 265, the Central Pay Commission formula allows Govt. Employees in the lowest pay group a dearness allowance of Rs.20/- and this amount remain unchanged until the cost of living index go above the index of the next level i.e. 285. We, therefore, consider that the employees in this pay group, a sum of Rs. 20/- which represents 50% of the present dearness allowance of Rs. 40 per month should be treated as pay (page 22 chapter V Report of the Dearness allowance Committee).”
- Retirement Benefits
- Travelling allowance
- Compensatory allowance
- House rent allowance
- Compensation of Leave Salary etc.
“From the past trend of CPI given in annexure 11’8.1 it is observed that 50% increase in prices generally takes around five years to materialise. A mid-term quinquennial revision of salaries of the Government employees is not something the Government should grudge. In view of the above, we recommend that DA should be converted into Dearness Pay each time the CPI increases by 50% over the base index used by the last Pay Commission. Such DA should be termed as Dearness Pay and be counted for all purposes including retirement benefits. (Chapter 105 page 157)”. The 5th CPC thus regularised the periodical merger of DA into a well thought 11. out scheme. They also established that wage revision is needed either when the DA exceeds 50% over the base index or after five years .
“This conversion (merger of DA with Pay) is however not necessary in the revised structure being recommended where increments are payable as a percentage of Pay in the Pay Band and Grade Pay thereon and provision has been made for all allowances/benefits to be revised periodically, linked to the increase in the price index. The Commission is, therefore, not recommending merger of DA with Basic pay at any stage.”
“2.g. To examine desirability and need to sanction any interim relief till the time the recommendations of the Commission are made and accepted by the Government. “
Name of articles
Price as 1.1.2006
As on date
Dhall 4 varieties; average
Edible oil.3 varieties.average
8. The need based minimum wage computed on the basis of Dr Ackroyd formula as on 1.1.2014 will be around Rs. 26,000 bringing about a gap of almost 12,000 at the level of an MTS. We shall submit the details thereof in our main memorandum.
9. The only Public Sector undertaking in which the wage agreement has been reached in 2013 is the Coal India Limited. As per the said agreement, the minimum wage at the lowest level of the worker as on 1.12014 is:
Dearness allowance: 29.6%
Special allowance: 4.0%
Special DA: 1.795%
Attendance bonus: 10%
Total: 49.395%-------------------------- Rs. 7132.46
Total salary: -----------------------------Rs.22844.46
At the MTS level 22.844.46 x 130% ---- Rs.29697.
10. As per the formula adopted by the 5th CPC, the minimum wage will work out to Rs. 22,857 as under:
A. Per Capita NNP at constant price for 2004-05 - Rs. 24,143
B. Per capita NNP at constant price for 2011-12 - Rs. 38,037
C. The increase registered over 8 years. - Rs. 13,894.
D. Percentage increase over 2004-05 - 57.54877.
E. Emoluments of an MTS as on 1.1.2014 - Rs. 14,000
F. 57.55% of Rs. 14,000. - Rs. 8,857.
G. Wage to be fixed in thecase of MTS as on1.1.14. - Rs. 22857.