Saturday, November 25, 2006

Pay Commssion asked to give report ealry : Chidambaram


The Finance Minister Sh. Chidambaram has said in Loksabha that Sixth Pay Commission has been asked to give its report as soon as possible. He said that the power to take decision regarding 'interim relief' has been vested with the Pay Commission itself and any decision regarding the interim relief will be taken by the Pay Commission itself. The Finanace Minister denied in Loksabha that Sixth Pay Commission is setup late in comparison to the Fifth Pay Commission. He said that normally pay commissions are setup after a gap of 11 to 13 years and Sixth Pay Commission is setup just after 12 years of the last pay commission i.e. Fifth Pay Commission.


  1. Anonymous10:35 AM

    Another blog on this subject:

  2. Anonymous6:32 PM

    Q & A:
    Should there be any comparison/parity between pay scales and perquisites in Government and the public/private sector?

    Certainly yes. It is to be noted that, not too long ago, the salaries in the private sector was not as attractive as in the government sector. Many of the serving government employees have joined the govt. service when they were having other options also. They have chosen to serve the people of the country over other options.
    Secondly, the government servant also will have to live, bring up and educate his children among those who are employed in the private sector or well paid public sector companies. In the present scenario even a Group ‘A’ officer would not be able to afford to send his child who has obtained admission on merit basis, to an IIM or any other premier educational institute, which is sponsored or established by the Government itself (not to speak of private institutes) as the expenses thereof per year would be more than the employees total income, whereas people who were not able to make it to the Civil Services being less competent, and hence joined the public or private sector, would be able to afford quality education for their children inside or even outside the country.

    Do you feel that the pattern of pay scales for all Group A Services should be redesignated so as to attract candidates of the requisite caliber? Keeping in view some of the compensation packages being offered to fresh professionals by the private sector, what emoluments would you suggest for an entrant to a Group-A Service in Government?

    My suggestion is that the latest mean average of the salaries offered to the pass outs of all IIMs should taken as the parameter by the Honourable commission while fixing the salary of entrants to group ‘A’ service. Apart from that all Group ‘A’ officials should be made entitled for:
    a. Reimbursement of cost of petrol (or any other fuel) at specified eligibility quantity, in lieu of payment of TA component in the salary. Even nationalized and public sector banks provide this to their officers (Most of the officers joining public sector banks are those who were not successful in the civil service exams). At the entry level the officer should be eligible for cost of 50 liters as applicable in the city of his posting.
    b. Air travel eligibility in economy class on official and LTC tour. Even nationalized and public sector banks provide this to their officers At present an officer posted in south will have to spend six days in train to attend a one day conference in Delhi.
    c. Rent free BSNL land and mobile phone and Internet connection. This is especially important as Group ‘A’ officers are supposed to be on duty round the clock.
    d. Lap top computers.
    e. Medical facilities. to include consultation in recognised private hospitals.
    f. Entitlement to stay in good quality hotels on tour. The condition is pathetic at present. Hotels can be specially recognized in each place for this purpose on concessional / contractual rates, like recognisation of CGHS approved hospitals in each city.
    g. At present like all other employees, Group ‘A’ officers also are entitled for LTC to hometown, with family, only once in two year block. Group ‘A’ officers are liable to be transferred to any place in India. Hence Group ‘A’ officers may be provided this facility once every year.
    h. The government needs to purchase/lease housing for Group ‘A’ officers.
    i. Other further incentives to match (to the minimum level at least) those provided by private sector. Some suggestions:
    a) Entertainment allowance.
    b) Facility to travel abroad to any one of the specified countries (as can be arranged as special packages each year in association with national air lines) or on any luxury train such as ‘Palace on Wheels’ in lieu of one ‘LTC to anywhere in India’ in the entire career subject to minimum specified years of service, and other conditions.

    Is it possible to quantify all other benefits, excluding pay, derived by employees in Government and the public and private sectors from security of tenure, promotional avenues, retirement packages, housing and other invisibles? In view of these benefits, can there be any fair comparison between the salaries available in the government vis-à-vis the salaries in the private sector?

    While considering this aspect, it has to be noted that at present, as far as the other benefits such as, promotional avenues, housing, LTA, medical benefits, TA, Tuition fee for the children etc. are concerned also, the private sector, is much more attractive than the Government sector. Regarding Pensions, which was considered as one of the most attractive factor in the Government sector, it is to be noted that, for the new entrants to the service even the pension has been made contributory, resulting in an actual decrease of 10% in their net take home salary. Even their savings through the PF attracts 0.5% less interest rate, than in the Private sector. (And the government does it by incurring huge expenditure to provide for this higher rate of interest to the private sector employees). In fact there has been only a reduction in the facilities provided to the Govt. employees. Suspension of LTC is an example. Another example is the CGHS facility, where the Government employee’s facility to consult specialist doctors (on reference) at recognized private hospitals has been taken away. Now even senior officials will have to consult Govt. doctors at General Government hospitals, which facility is even otherwise available to all, irrespective of their being in the Govt. service and paying a contribution for CGHS. Another point to be considered is that the salary of the government employee is as such subject to laws and rules of Income Tax, whereas in the private sector, very conveniently they split the salaries in to components and reimbursements so as to avoid to the maximum level, the income tax.

    In order to ensure a fair comparison based on principles of equity and social justice, would it not also be appropriate to take into account the economic conditions of large sections of the community that are less privileged than Government employees and many of whom live below the poverty line?

    In fact the bureaucracy being well or adequately paid is in the interest and for the welfare of the large sections of the community, and promotes equity and social justice, for the following reasons:
    e) It is the Government machinery, which has to formulate and implement schemes and programs for the welfare and benefit of the larger community. Hence it is necessary that the Government machinery is manned with people with ability and quality, which cannot be attained if the working conditions are not attractive, especially so, in the ‘high pay’ era of private enterprises.
    f) Government sector provides and ensures employment opportunities for the talented among the under privileged sections of the society including SC/ST, OBC, physically handicapped, etc. The well-paid jobs in the private sector are accessible mainly to the convent / public school educated elite layer of the society. Moreover, there are no prescribed criteria for the recruitment in to the private sector employment. It is as per the wishes of the management. So Government sector is the only avenue available for the children of the poor ordinary man, to come up in life by their own efforts. If salaries in the Government are not made at par with that of the private sector, it only adds to widen the gap between the elite and the poor sections of the society.
    g) Being underpaid (as it is today) would only demoralize the public servant, which in turn would slow down the process of development of the country.
    h) An adequately paid civil service would be less or not corrupt, which again is more beneficial for the community.

    Salary structure in the Central and State Governments is broadly similar. The recommendations of the Pay Commission are likely to lead to similar demands from employees of State Governments, municipal bodies, panchayati raj institutions & autonomous institutions Their paying capacity is considerably limited. To what extent should this factor be considered in devising a reasonable remuneration package for Central Government employees?
    The central government service has always been and should always be above all other Government or local body services. People with much more competence only are able to get through the recruitment process in all levels of the central service, when compared to state or other such services. This difference will always reflect on the pay structure also. However more avenues may be provided for qualified employees with sufficient service, from such services for deputation (and absorption also) into Central services.
    Another point to be considered is that, unlike the state government and other employees, the central Govt. employees are liable to be transferred and posted at any where in the country. This causes them much difficulty financially and in other ways. The studies of their children are most affected, and for reasons related to that quiet often the employee will have to stay apart from family again causing much expenses as he has to provide means for two households, apart from personal difficulties and emotional issues.
    In fact the factor to be considered in devising a reasonable remuneration package for Central Government employees is the pay structure in public sector organizations including ONGC, Reserve Bank, Nationalized and public sector Banks, SEBI, the oil companies, Govt. owned air lines Etc. It is an undisputed fact that the selections to these organizations are much less tougher compared to selection by UPSC or SSC to the corresponding ranks. It is also true that a very high percentage of the officers of these organizations have chosen them on their failure to get through the civil service and other UPSC examinations. There is need to make at least the Group ‘A’ services, if not higher, at least at par with the pay and other emoluments provided by the best of such organizations. There is also need for providing a quota for deputation from the Government sector to higher positions in these organizations.

    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?
    While fixing the salaries of a Secretary in the Central Government who heads a department in the entire country, the salaries of the CEOs of the nations best performing five private sector companies and five public sector organizations may be looked into as a parameter. Appointment on contractual basis can also be considered. Instead of linking performance with salary, the system of monetary incentive may be implemented for encouraging better performance.

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

    In the private sector (especially in software, banking, Telecommunications, Insurance etc.) an employee gets promoted to the next position in about three years, whereas in the government the same takes many more years. This will definitely demoralize the presently serving employees, and would fail to attract the cream of talent to join also. A minimum and reasonable increment of 10% of Basic pay per year is to be provided in each scale of pay, defining also the number of years to be normally served in that scale on the expiry of which the employee will have to be, if not promoted to the next higher position, at least entitled to draw pay at the next higher scale. For example, for a Group ‘A’ officer the span of tenure to be served in the entry level should not be made more than Three years.

    Is there a case for a Unified Civil Service, merging therein all Central (both technical and non-technical) and All India Services, allowing vertical and horizontal movement ? Or should there be two distinct
    streams, one embracing all the technical services and the other for non-technical services?
    Unification of Civil Service, merging therein all Central (both technical and non-technical) and All India Services will definitely be in the better interests of the nation and the officers. However it should be also considered that there are certain areas and offices, which needs technically competent persons. In any case vertical and horizontal movement among the services for persons having requisite skill or experience will only strengthen the Government machinery as a whole, and help to attain more expertise to, and boost the morale of the employees. This system should be implemented, and extended to include the posts under state Governments also and be encouraged.

    Is there any need to revise the pay scales periodically especially when 100% neutralization for inflation is available in form of dearness allowance?
    Firstly 100% neutralization for inflation does not happen actually by way of dearness allowance. Secondly there are certain other components in the present salary structure like TA, CCA, to which DA is not applicable. Hence the present system of revising the scales once in ten years is not sufficient, nor justifiable. The scales should be revised once in every five years. Even nationalized and public sector banks follow this practice.

    Is City Compensatory Allowance a sufficient compensation for the problems of a large city? If DA and HRA provide full neutralization, do you think CCA should continue? Is there a need for changing the basis of classification of cities and the rates of CCA? If so, please suggest the revised basis and rates.

    CCA will have to be continued considering the higher cost of living in the cities. CCA at the highest rate today is Rs. 300/- only which provides an amount of less than Rs.10/- per day for a family in cities including Mumbai, Delhi, Bangalore etc. where the cost of living is very high compared to other towns and villages. The present rate which was fixed more than a decade ago is very much meager by all standard. The rate of CCA for different cities will have to be increased at least six fold of what it is today.
    There is definitely a need for changing the basis of classification of cities and the rates of CCA. City living cost is directly connected to factors including the general income of the residents, price of petroleum products in that city etc. A very good example is Bangalore, the Software capital of India, where very high salaries are paid to people in the software and related fields, which constitutes a large portion of the residents. Naturally the pay in other private sector areas also is on the higher side in that city. Apart from that, the price of petroleum products in the city is also among the highest in the country, resulting in a corresponding increase in the cost of living. But very recently only the Government increased CCA in that city to 300. Which also is not at all sufficient.
    It is also not correct to say that DA and HRA provide full neutralization. Again if Bangalore is taken as an example, the HRA provided for is only 15%. In fact the average actual house rent in that city is much higher than the average actual house rent in some other cities where HRA of 30% is paid. (Needless to say that HRA even at the rate of 30% of the present pay scales are not enough for a decent accommodation). A direct recruited officer of civil service (Group ‘A’ Basic pay starting at 8000) posted in Bangalore will get an HRA of Rs. 1800/- per month (15% of basic pay + DP) only, with which it is not possible even to get a one room accommodation with the least minimum facilities.

    What steps should be taken to ensure that scientists, doctors, engineers and other professionals with sophisticated education and skills are retained in their specialized fields in Government? Should they be appointed on contract with a higher status and initial pay, advance increments, better service conditions, etc.?
    Scientists, Doctors, Engineers, Advocates, Chartered Accountants, Company Secretaries, and other specified professionals wherever such professional qualifications with or without previous experience are prerequisite for applying for the post should be paid a special allowance similar to what is paid now to Doctors as Non Practicing Allowance. Otherwise it will be difficult to retain or attract talented professionals to Government service. Apart from that a one-time increment can be given to persons having such professional qualification at the time of their joining or on their acquiring such qualification, wherever such qualifications are useful in their discharging their duties.

    Should there be lateral movement from Government to non-Government jobs and vice versa? If so, in which sphere(s) and to what extent ?
    Permission to shifting to private sector in India or abroad with a lien in the serving cadre will help to attract more talented people and also to reduce work force. Grant of long leave for the same purpose (as now provided by Govt. of Kerala to it’s employees) also is good scheme. However, strict conditions will have to be implemented to prevent misuse of this facility. Shifting from private sector is possible now also. The same should not be permitted on temporary basis as it could be misused to infiltrate the Government sector by private companies to protect their interests.

  3. Anonymous5:02 PM

    the implement of sixth pay commision should be from 1/1/2006. because the cost is rising so itreim relief { minmum RS 1000} for central govermet employes should be decleared.

  4. Anonymous10:32 AM

    It is almost one month since your last posting. after tha,there is no feedback. IIM ahmedabad was to submit it's report in june and Jamshedpur too. I will be grateful if you let us know about the latest development as media gives different versions which are quite conflicting. One rumour is there that IIM Agmedabad has submitted it's interim reprt to commission. Pl clarify.

  5. Anonymous4:52 PM

    HRA to Central Govt Employees

    HRA payment needs rationalization. In metros if govt pays 30% of basic, In B1 cities it should be 25%, B2 20% and C class cities 15% and in rural areas and un-notified towns 10%. Cost of living has increased everywhere.

  6. Anonymous4:55 PM

    CCA to Central Govt Employees
    If CCA is 800 in metros, it should be Rs 600 in B1, 500 in B2, 300 in C class and 200 in notified towns.

  7. Anonymous4:59 PM

    Travelling allowance to central govt employees

    Travelling allowance should be Rs 1500, 1000, 800, 600 and 400 depending on pay scale and city.

  8. Anonymous7:31 PM

    What about the bankkers dear anyone have any idea what is goint to happent o NAking salary structures in the 6 (sixth) pay commision ..??

    what will be the hike like ??