7th Pay Commission: Confusion Over Hike in Minimum Pay, Fitment Factor After Conflicting Reports on NAC

7th Pay Commission: Confusion Over Hike in Minimum Pay, Fitment Factor After Conflicting Reports on NAC

The central government employees are in a state of confusion regarding a hike in minimum pay and fitment factor beyond the recommendation of the 7th Pay Commission or 7th CPC. Conflicting reports about the National Anomaly Committee (NAC), which was formed to resolve all matters related to the implementation of the 7th Pay Commission recommendations, have left the central government employees puzzled. There is no clarity whether the NAC will suggest a hike in minimum pay and fitment factor beyond the recommendation of the 7th Pay Commission.

Pay hike, fitment factor not an anomaly

A letter written by D K Sengupta, deputy secretary to the Government of India stated that the Minimum Pay Hike and Fitment Factor doesn’t appear to be an ‘Anomaly’. “As against the Minimum Wage decided to be Rs 18,000/- by the Govt. w.e.f. 01.01.2016 while the Staff-Side has said that this should be not less than Rs 26,000/-and the multiplication factor ought to have been 3.714 and not 2.57.

They have further asked for the pay matrix to be changed. Objecting to the methodology adopted by the 7th Pay Commission in computing the Minimum Wage, they have given a number of reasons like the retail prices of the commodities quoted by the Labour Bureau being irrational, adoption of the 12 monthly average of the retail price being contents to the Dr. Avkrovd formula, the website of the Agriculture Ministry giving the retail prices of commodities forming the basis of computation of minimum wage provides a different picture, so on and so forth.

However, when one compares this item with the three situations given in DoPT’s OM. No. 11/2/2016-jCA dated 16th August, 2016 and 20th February, 2017, it does not appear that this satisfies any of them to be treated as an anomaly.”

Meanwhile Shiv Gopal Mishra, in September, denied reports that claimed the NAC would suggest a hike in minimum pay beyond the recommendation of the 7th Pay Commission. “This is not true. We have received no such confirmation. As a matter of fact, the national anomaly committee is not looking into the issue of minimum wages. A separate committee has been constituted to look into minimum wages and this issue has been raised twice in front of Finance Minister Arun Jaitley,” Mishra said.

3 per cent increment not anomaly

The CG employees have been arguing that despite the foreword to the Report making it clear in para 1.19 that the prevailing rate of increment is considered quite satisfactory and has been retained, an illustrative list appended by them shows instances where the pay, gone up after the addition of annual increment by 3%, falls short of what it would have been.

They have quoted para-5.1.38 of the report also which states that the rate of annual increment would be 3%. While what the Staff-Side has stated has its own merits, the fact of the matter is that the principle followed here is whenever a stage of pay, after addition of an increment, falls short of the nearest hundred by less than 50, the employee would be entitled to get the amount mentioned in the immediately next cell in the Pay-Matrix.

However, when the gap is that of more than 50, the pay, on addition of an increment, is rounded off to the nearest hundred which travels backward. For instance, if staying at Rs 46,100/- one gets an increment @ 3%, instead of having his/her pay fixed at Rs 47,483/- (which is the exact figure), it will be Rs 47,500/- (thus gaining by Rs 13/-). Thus it is not a case of permanent loss as the loss in one year is made good in the second/third year. Considering this to be a situation of swings and roundabouts, this may not be treated as a case of anomaly.


The trade unions that have called for the protests included All India United Trade Union Centre (AICCTU), Trade Union Coordination Centre (TUCC), Indian National Trade Union Congress (INTUC), All India Trade Union Congress (AITUC), Hind Mazdoor Sabha (HMS), Centre of Indian Trade Unions (CITU), Self Employed Women’s Association (SEWA), All India Central Council of Trade Unions (AICCTU), United Trade Union Congress (UTUC) and Labour Progressive Federation (LPF).

RBI fears going beyond 7th Pay Commission recommendations

The Reserve Bank of India continues to fear that rising consumer prices will threaten the central bank’s inflation target of 4% which led the monetary policy committee (MPC) to vote for status quo in the October 2017 policy. Among other reasons RBI was fearing for higher inflation, one was related to allowances under the 7th Pay Commission.

Source: India.com