Monday, 4 January 2016

Impact of the recommendations of 7th Pay Commission – NFIR

Impact of the recommendations of 7th Pay Commission – NFIR

National Federation of Indian Railwaymen
3, Chelmsford Road, New Delhi – 110 055

Dated : 4.1.2016
The Addl: Member (Budget),
Railway Board,
New Delhi

Dear Sir,
Sub: Impact of the recommendations of 7th CPC- reg.

Ref: AM(B) note No. 2015-B-265 dated 23/12/2015 addressed to GS/NFIR.

With reference to the note received from AM(B) dated 23/12/2015 on the subject relating to the implementation of the recommendations of 7th CPC on Railways, the Federation at the outset conveys as follows:-

During discussions with the Hon’ble MR and the Board (CRB, FC, MS) on 23rd December 2015, the NFIR General Secretary has expressed that there is all-round unhappiness on 7th CPC recommendations as in many cases the ‘Take Home Pay’ is either very marginal or less than what is received by the employee now. The Federation also disputed the estimated financial implications (Rs.28,500 crores) and said that the estimated expenditure has been exaggerated. It was also brought to the notice of the MR the retrograde recommendations of 7th CPC, while the case of Railway employees of various categories was not dealt adequately and the Railway Ministry has unfortunately not apprised the inadequacies of Grades Pay and Pay Band of 6th CPC to the Chairman, 7th CPC.

2. As desired vide note dated 23/12/2015, the Federation furnishes the followins details as Annexures to this letter.

(a) Table -I gives the position of 6th CPC minimum pay in Pay Band & Grade pay (PB-1 to PB-3) as on 01/01/2016.
(b) Table -I (a) explains the 7th CPC minimum pay from Level-l to Level-12 of the Pay Matrix.

[A comparison of Table-I with Table-I(a) reveals that the net benefit is marginal at Level-1, minus at Level-2. However, there may be substantial increase from Level-7 and above. If Income Tax deduction takes place, the increase will fall.]

(c) Table-II indicates 6th CPC minimum pay in GP + Pay Band without HRA.

Table-II (a) gives 7th CPC minimum pay without HRA (staff in occupation of Railway quarters are not entitled for HRA).

[A comparison of Table-II with Table-II (a) shows minus ‘Take Home Pay’ for employees of Level-I to Level-6 of Pay Matrix and equally marginal increase to those in Level-7, 8 & 9 of pay Matrix. Again in Level-10 the ‘Take Home Pay’ will be less than the present amount’. Overall position will be either “minus” or “marginal increase”. The Income Tax deduction would further worsen.]

(d) Table-III shows the approximate 6th CPC pay of employees after drawal of 10 annual increments.

Table III(a) provides information pertainingto7th CPC Pay (approx) for staff in Level-1 to Level-12 (Pay Matrix).

[A comparison between Table-III and Table-III(a) reveals that there will be marginal increase to those in Level-1 to Level-6. Although there will be an increase of more than 2400 to those in Level-7 to Level-12, the Income Tax deduction would reduce their ‘Net Take Home Pay.’

(e) Table-IV gives position of 6th CPC Pay of staff (without HRA + 10 annual increments – approx) as on 01/0112016

Table-IV(a) explains 7th CPC Pay without HRA as on 01/01/2016.

[A comparison of Table-IV with Table-IV (a) reveals that those in 7th CPC Pay Matrix Level-1 to Level-12 will draw minus salary. With Income Tax deduction, the position may be more worse.]

Note: (i) In the case of employees living in Railway Quarters (nearly 40%) the financial

(ii) The unfilled vacancies are approximately over two lakhs since the last two years. The implications of HRA will be Zero. The costs of these posts have already been saved by the Indian Railways.
Encls: Annexure I to Annexure IV
Yours faithfully,
General Secretary
Source: NFIR

Payment of Bonus Act Amendment Gazette Notification

Payment of Bonus Act Amendment Gazette Notification

The Gazette of India
PART II — Section 1
No. 6] NEW DELHI, FRIDAY, JANUARY 1, 2016/PAUSHA 11, 1937 (SAKA)
Separate paging is given to this Part in order that it may be filed as a separate compilation.

(Legislative Department)
New Delhi, the 1st January, 2016/Pausha 11, 1937 (Saka)
NO. 6 OF 2016
[31st December, 2015.]
An Act further to amend the Payment of Bonus Act, 1965.
BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:—

1. (1) This Act may be called the Payment of Bonus (Amendment) Act, 2015.
(2) It shall be deemed to have come into force on the 1st day of April, 2014.

2. In section 2 of the Payment of Bonus Act, 1965 (hereinafter referred to as the principal Act), in clause (13), for the words ‘‘ten thousand rupees’’, the words ‘‘twenty-one thousand rupees’’ shall be substituted.

3. In section 12 of the principal Act,—
(i) for the words ‘‘three thousand and five hundred rupees’’ at both the places where they occur, the words ‘‘seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher’’ shall respectively be substituted;
(ii) the following Explanation shall be inserted at the end, namely:—
‘Explanation.—For the purposes of this section, the expression ‘‘scheduled employment’’ shall have the same meaning as assigned to it in clause (g) of section 2 of the Minimum Wages Act, 1948.’.

4. In section 38 of the principal Act, for sub-section (1), the following sub-section shall be substituted, namely:—

‘‘(1) The Central Government may, subject to the condition of previous publication, by notification in the Official Gazette, make rules to carry out the provisions of this Act.’’.

Secretary to the Govt. of India.

Making para military forces as organised services

Making para military forces as organised services

Minister of State for Home Affairs Shri Kiren Rijiju said in the Parliament as in a written reply to a question on 23.12.2015 about the Para Military Forces as given below…

Question : Whether Government is aware of a judgement passed by Delhi High Court observing that Centre must consider all para-military forces-CRPF, BSF, ITBP, CISF and SSB as organized services to extend them not just financial benefits but better promotional and deputation avenues in Government, including Non-functional Financial Upgradation (NFU) from 2006 in terms of the Sixth Pay Commission.

Answer : The Hon’ble High Court of Delhi has given a judgement on 03.09.2015 to grant the benefit of Non Functional Upgradation (NFU) as recommended by the 6th Central Pay Commission to Group ‘A’ officers of Central Armed Police Forces (CAPFs). However, the same has been challenged by filing Special Leave Petition (SLP) before the Hon’ble Supreme Court of India, which is sub-judice.

Decrease in Take Home Salary from 6th to 7th Pay Commission – IRTSA

Decrease in Take Home Salary from 6th to 7th Pay Commission – IRTSA


7th CPC has submitted its report to the Government and the additional expenditure projected by the PAY Commission is of 1.02 lakh rupees. As outsiders many of the country men started crying hoarse that the Govt. employees are taking away lions’ share of its income.

Out of the projected 1.02 lakh hike, just above 1/4th is going to be borne by Indian Railways within its own budget; centre has to bear 1/4th towards pension, 1/4th towards allowances and only 1/4th towards Pay. Govt. need to borne only Rs.27,750 crores towards increase in pay. Allowances need not be taken as higher expenditure since they are part of compensation towards inflation and expenditure incurred in discharge of official duties.

7th CPC itself observed that financial impact on account of increase in pay, allowances & pension will be 23.55%. Increase on account of Pay & DA (excluding other allowances) will be to the tune of 16%. At present, without implementing 7th CPC Report, Year on year increase in the expenditure in both pay and pension has averaged about 11% of the Central Expenditure. Thus real increase on account of increase in pay, all allowances & pension will be only 12.55% (23.55% – 11% = 12.55%). Real increase on account of Pay & DA will be only 5% (16% – 11% = 5%).


Real increase in minimum wage between 6th CPC & recommended 7th CPC scales will be Rs.2250. Employees’ contribution to National Pension scheme will increase from Rs.700 to Rs.1800 and for CGEGIS it will increase from present Rs.30 to Rs.1500. Therefore increase in real wage (take home pay) of Rs.2250 will be eaten away by Rs.900 increased contribution for NPS plus Rs.1500 for CGEGIS. Net take home pay will have a negative growth of Rs.320 (Rs.1100 + Rs.1470 – Rs.2250 = Rs. – 320) as illustrated in the table below:



Government will take back into its treasury Rs. 6500 crores from increased monthly contribution towards CGEGIS and another Rs.2500 crores towards employees’ contribution for NPS from 11 lakh employees appointed after 1.1.2004. After reducing Rs.9000 crore from Rs.27,750 crore (projected increase in pay), net additional expense towards Pay will be around Rs.18,750 crores only. Even this additional expenditure is not true.

Total Expenditure on Pay & Allowance in FY 2012- 13 was Rs.1,29,599 crore. If it is indexed by 11% increase year on year, in the FY 2015-16 even without implementing 7th CPC recommendations increase on account of Pay & Allowances will be around Rs.19,500 crore. Therefore Government is not going to have any additional expenditure on account of Pay increase after the implementation of 7th CPC Report as per its recommendations.

For 2012-13, revenues foregone through various concessions to various sections are estimated at a total of Rs.5,73,627 crore which was 10 per cent higher than the total fiscal deficit of the Central Government, financial experts say, concessions must be given to have accelerated economic growth. Government employees are exposed to negative growth in their real wage – but who cares?

Pongal Bonus for Tamilnadu State Government Employees

Pongal Bonus for Tamilnadu State Government Employees

The State government of Tamil Nadu on Sunday announced Pongal bonus for its employees, teachers and pensioners. This will incur an additional expense of Rs. 326.85 crore to the government.

According to the announcement made by the Chief Minister J. Jayalalithaa, government employees and teachers in ‘C’ and ‘D’ Groups will get bonus equal to 30 days salary with a ceiling of Rs. 3,000.

The officers and teachers belonging to the ‘A’ and ‘B’ categories, will receive a special bonus of Rs. 1,000. Pensioners, family pensioners and retired village officers will get Rs. 500 as Pongal gift.

Expected DA from January 2016 – 2 Point increase in December 2015 may change 7th Pay Commission fitment formula

Expected DA from January 2016 and its impact on 7th Pay Commission Pay fixation formula and Multiplication Factor – If CPI-IW for December reaches 272 then 7th Pay Commission multiplication factor will have to be revised to 2.58

Expected DA from January 2016 – 2 Point increase in December 2015 may change 7th Pay Commission fitment formula

Expected DA from January 2016 – Two Point increase in CPI for Dec 2015 could take it to 126% which is 1% more than what was reckoned for 7th Pay Commission revised Pay fixation.

If DA from January 2016 touches 126%, 7th Pay Commission fitment formula and Multiplication factor of 2.57 may require upward revision

Consumer Price Index (Industrial Workers) for the month of November 2015 has been released recently by Govt. We have one point increase in CPI for November 2015 which has moved from 269 to 270.

Consumer Price Index from January 2015 to November 2015

Month Actual AICPI-IW
Jan-2015 254
Feb-2015 253
Mar-2015 254
Apr-2015 256
May-2015 258
Jun-2015 261
July-2015 263
Aug-2015 264
Sep-2015 266
Oct-2015 269
Nov-2015 270
Dec-2015 Not released

DA from January 2016 – Estimation for 125%:


DA from Jan 2016= [(254+253+254+256+258+261+263+264+266+269+270+258)-115.76]*100/115.76
= 125 % (6% increase in DA from Jan 2016)

Based on actual CPI-IW for 11 months from January 2015 to November 2015 which span from 254 to 270 and estimated index for the month of December 2015, it is almost certain that Dearness Allowance from January 2016 payable to Central Government Employees including Railway Employees and Defence Personnel will not be less than 125% (6% increase).

Even a 12 point fall in CPI-IW from 270 to 258 in December 2015 will not affect the DA from January 2016 clocking 125%.

DA from January 2016 – Estimation for 126%:

Our Proposition discussed in the earlier article on the chances for DA from January 2015 reaching 126% (7% increase) still holds good as two point increase in the CPI-IW in December 2015 would take DA from January 2016 to 126%.

DA from January 2016 126%

DA from Jan 2016= [(254+253+254+256+258+261+263+264+266+269+270+272)-115.76]*100/115.76
= 126 % (7% increase in DA from Jan 2016)

DA from January 2016 – Estimation for 127%:

At the same time possibility of DA from January 2016 reaching 127% or more is remote as CPI-IW has to reach 286 in December 2015 from the present level of 270 for getting DA of 127%.

DA from Jan 2016= [(254+253+254+256+258+261+263+264+266+269+270+286)-115.76]*100/115.76
= 127% (8% increase in DA from Jan 2016)

So, DA from January 2016 will be either 125% (6% increase) or 126% (7% increase). One might think that 1% additional DA from January 2016 is negligible. However, it will be 1% more than what was reckoned for 7th Pay Commission revised Pay fixation.

7th Pay Commission has estimated DA from January 2016 as 125% for the purpose of Revision of Pay and Allowances

Now, if Consumer Price Index (Industrial workers) for the month of December 2015 reaches 172 from the present level of 170, it is certain that DA from January 2016 will be 126%. In that case, 7th Pay Commission pay fitment formula and allowances which are DA indexed will have to be revised accordingly.

For instance, 7th Pay Commission’s uniform multiplication factor of 2.57 includes a factor of 2.25 on account of DA neutralisation, assuming that the rate of Dearness Allowance would be 125 percent at the time of implementation of the new pay. If DA from January 2016 reaches 126% then this multiplication factor will have to revised as 2.58.

Source: gconnect

NMC urges PM to immediately issue 7th Pay Commission notification

NMC urges PM to immediately issue 7th Pay Commission notification

Jammu: The National Mazdoor conference (NMC) today urged Prime Minister Narendra Modi to immediately issue notification regarding the implementation of the 7th Pay Commission report.

“We urge the Prime Minister to immediately issue notification regarding the implementation of the 7th Pay Commission report respect of central government employees and pensioners,” NMC president Subash Shastri said.

“We are hopeful that the Prime Minister will remove any confusion and ambiguity regarding the implementation of the 7th Pay Commission report,” he added.

Shastri expressed hope that the PDP-BJP government in Jammu and Kashmir will also take steps to implement the recommendations made in the 7th Pay Commission for state employees and pensioners.

“We also hope that the state government will regularise the service of 61,000 daily rated workers who have been working in various departments for several years,” Shastri said.
Inputs with PTI

Ex-servicemen meet FM Jaitley, seek changes in OROP notification

Ex-servicemen meet FM Jaitley, seek changes in OROP notification

New Delhi: A delegation of ex-servicemen on Sunday met Finance Minister Arun Jaitley and submitted a memorandum seeking “corrections” in the One Rank One Pension (OROP) notification, as their protest on the issue entered the 203rd day.

“A five-member delegation met the Finance Minister and told him that the actual OROP has not been granted.

The notification issued has serious flaws and we requested him for corrections in it and granting of actual OROP as per the approved definitions,” retired General Satbir Singh said.

“The minister has assured us that he will speak to the Defence Minister about our demands,” he added.
A group of 100 ex-servicemen including those from Haryana, Punjab, UP and NCR area also protested outside Jaitley’s residence and then moved to Jantar Mantar.

“For last 6 months, our ex-servicemen are protesting at Jantar Mantar demanding OROP which has been passed by both Houses of Parliament. But the government has been neglecting our demands again and again. It is our request to give us our real OROP,” Arif Ali Khan, one of the protesters, said.

“We had given a notice to the government 21 days ago that we have been protesting peacefully so far. But we have been forced now to go beyond Jantar Mantar. We will now resort to blocking traffic, train and roads if they remain deaf to our demands. We will also disrupt Parliament if need be”, he said.

Another veteran Lieutenant Kameshwar Pandey said, “we feel cheated as this is not the real OROP what government has promised. A proper parliamentary procedure must be followed to make any amendments. We just want the government to refrain from such manipulations”.

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