Government in a Comfortable Position to Increase Minimum Pay and Fitment Formula – Karnataka COC

Revision of Minimum Pay and Fitment formula due to increased revenue collections of the Central Government


Today none of the 7th CPC related demands of Central Government Employees are settled. The assurance given by the Group of Ministers to the NJCA leaders regarding increase in Minimum Pay and Fitment formula is in paper even after a lapse of 20 months. Now the Finance Minister has replied in Parliament that “no change in Minimum Pay and Fitment formula is at present under consideration”.

To avert the 11th July CG employees strike the Hon’ble Prime Minster had instructed the group of Hon’ble Ministers including Shri Rajnath Singhji, Hon’ble Home Minister, Shri Suresh Prabhuji , Hon’ble Railway Minister    and Shri Arun  Jaitelyji , Hon’ble  Finance Minister to hold discussions with the Staff Side (JCM) on 30th June 2016 and the Shri Arun  Jaitelyji , Hon’ble  Finance Minister had published a written assurances in the Government  website on 6th July 2016 leading to deferment  of the strike .

Pay Commission Objective:It is the endeavour of every pay commission to ensure that the pay and allowances of employees should be ‘fair and reasonable’. The pay structure should also motivate the employees to reasonable levels of performance in the tasks assigned to them, so that the general public derive the benefit of their service as intended.

Our demand of revision of Minimum Pay and Fitment formula is quite justified.

Comparison of earlier wage hike we can observe that the fitment factor of 2.57 times is the lowest comparing to other pay commissions. If we make a study of earlier pay commission.

Pay Commission Year Minimum wage ( old ) Minimum wage (revised) Increase
2nd CPC 1959 Rs 55/- Rs 80/- 1.45 times
3rd CPC 1973 Rs 80/- Rs 196/- 2.45 times
4th CPC 1986 Rs 196/- Rs 750/- 3.82 times
5th CPC 1996 Rs 750/- Rs 2550/- 3.40 times
6th CPC* 2006 Rs 2550/- Rs 7000/- 2.74 times
7th CPC * 2016 Rs 7000/- Rs 18000/- 2.57 times

Comparative picture of pay of Central Government and State Government in regards to minimum wage as on  1.7.2017

Many of the State Governments are following the Central Government pay scales, but a few state Governments have improved upon the Central Government pay scales. The examples are as under:

Government Agency Group “D” Basic pay in Rs Add Skill 25% from Group “D” to Group “C” Group “C”

Basic Pay in Rs

DA % Add DA Amount in Rs Basic Pay in Group “C” in Rs
Govt. of India Nil 18000 5 900 18900
Andhra  Pradesh &  Telangana  13000 3250 16250 24.1 3916 20166
Kerala 16500 4125 20625 14 2887 23512
Karnataka 17000 4250 21250 Nil 21250

The financial position of the Central Government is very good. Even the GDP (Gross Domestic Product) has shown increase in last few years which is around 7% ,  the Indian economy is fastest growing and placed 7th in the world  ( which is at 2,250.987  billions of $ ), comparing to wages paid in the world our wages are at lower level. The Government fiscal budget deficit equal to 3.50 percent of the country’s Gross Domestic Product in 2016. Compared to 2008 where the fiscal deficit was at 7.8 %, but today the fiscal deficit is contained at 3.5%. This is also a healthy sign of the economic status of the Central Government financial status, the budget fiscal deficit is always below 4%.

Direct tax collections in 2017-18 at Rs 9.95 lakh crore, exceeded the revised budgetary target of Rs 9.8 lakh crore. Also, 6.84 crore income tax returns filed in the year against 5.43 crore in the previous year signalling a rise of 26 % . A net of 99.5 lakh new assesses were added to the tax net.

Net collection from corporate tax went up 17.1 per cent while that from personal income tax rose 18.9 %.

The revenue collection from Goods and Services Tax (GST) exceeded Rs 1 lakh crore in April 2018, GST revenue collected in April 2018 came at Rs 1,03,458 crore.

With the improved economic climate, introduction of e-way bill and improved GST compliance, GST collections would continue to show a positive trend.

The wage bill of the Central Government on in its employees is less than 10% or 3.4% of the GDP, which is less compared to various countries world wide .

Government in a Comfortable Position to Increase Minimum Pay and Fitment Formula - Karnataka COCVacancy of the Central Government is about 15 % , more than 4 lakhs vacancies are existing in the Central Government the work load is being carried out by the existing employees. The Government being a model employer should pay for its employees and motivate them to work more for implementation of its policies.

Hence due to the improved revenue earning of the Central Government, as assured to the staff side JCM by the Group of Ministers in respect of increase of Minimum Pay and Fitment formula, the Central Government should increase the MinimumPay and Fitment formula.

Source: Karnataka COC