7th CPC Quessionare – Reply given by JCM National Council (Staff Side)

7th CPC Quessionare – Reply given by JCM National Council (Staff Side)

No.NC-JCM-2014/ 7th CPC

May, 2014

The Secretary,
7th Central Pay Commission,
New Delhi

Sub: – Reply to Questionnaire

Respected Madam,

We are enclosing herewith reply to Questionnaire on behalf of National Council (Staff Side) JCM for kind consideration of the Commission.

With regards,

Yours faithfully,

(Shiva Gopal Mishra)
Secretary

7th CPC Questionnaire

1. Salaries

[textmarker color=”C24000″]1.1 The considerations on which the minimum salary in case of the lowest Group ‘C’ functionary and the maximum salary in case of a Secretary level officer may be determined and what should be the reasonable ratio between the two.[/textmarker]

Any Commission which considers the question of emoluments for employees/workers should first be inspired by the implication flowing from the amendment to the preamble of our Constitution where-by the words “socialist & secular” were prefixed to the word “Republic”, as also the Directive Principles of State Policy enshrined in Article 43 i.e. the state should endeavour to secure living wage for its employees/workers.

Group C is a skilled worker.  MTS is the lowest category of Group C. The 6th CPC evolved the MTS by amalgamating some of the unskilled, semi-skilled and skilled functions without  any scientific basis or logic.   From the standpoint of the stipulation in the recruitment rules, eligibility criteria etc, MTS deserves to be categorized as a skilled worker.   In practice, most of the departments have outsourced or contractorised the unskilled or semi skilled jobs leaving the MTS to cater to the requirements of the skilled functions.

Wage structure in civil service is to be determined on the basis of the computation of the minimum wage; fair comparison of wages elsewhere, growth in the economy etc. The living wage, which is a constitutional guarantee, has not been defined.   The 15th Indian Labour Conference held in 1957 brought in the concept of “Need Based Minimum wage” on the basis of Dr. Aykhroid formula.  The need based minimum wage is required to be provided  for  an unskilled worker whenever one is employed.   The definition underwent minor changes, when the Supreme Court revised the norms later.  Presently there are no unskilled regular employees’ cadre in Government of India services.  The Commission is required to first determine the need based minimum wage as per the Dr. Aykhroid  formula  and  make  necessary  adjustment  to  determine the wages  of  MTS which is the lowest category in Government of India services. The co-relation of the wages of the skilled and unskilled worker at the lowest grade had always been of the order of 130% for the skilled worker.   The minimum of the pay of the MTS/SS has therefore to be determined at 130% of the need based minimum wage.

The minimum maximum ratio obtaining in different countries as per information gathered by V CPC was as under:

Malaysia          –           1:3

Sweden                         1:4

USA                   –           1:4

Britain              –           1:6

France              –           1:6.6

Indonesia         –           1:6.9

 Australia          –           1:7.7

Thailand           –           1:9

However, the earlier Pay Commissions had adopted a ratio of 1:10.  Since the minimum wage in the Central Government sector is no more related to an unskilled worker, this ratio must be proportionately changed to 1:8.  If one is to take into account the fact that the Pay of Cabinet secretary, being the topmost Civil Servant is excluded by the 6th CPC, the ratio in reality between the minimum and maximum  will be more than 1:9.

Therefore, so far as maximum salary in the case of a Secretary level officer is concerned the reasonable ratio between minimum and maximum salary may be taken as 1:8 and salary of Secretary level officer may be fixed by multiplying the minimum wage by a factor of 8.

[textmarker color=”C24000″]1.2 What should be the considerations for determining salary for various levels of functions falling between the highest level and the lowest level functionaries?[/textmarker]

Salary for various levels of functions falling between the highest and the lowest level functionaries  should  be  determined  by  applying  the  existing  vertical and  horizontal relativities which have been evolved over a time through various Pay Commissions.

In  respect  of  special  functionaries  like  Professionals  and  technocrats  who  normally prefer to work in the Private Sector and therefore either do not offer themselves for Government service or tend to leave it and go over to the Private Sector, Instead of providing  them  the  salary  structure  of  Group  A  administrative  post  they    may  be granted a special Pay package.

Similarly semi-skilled workers engaged in hazardous activities like scavenging, maintenance of rail track, in Laboratories, Hospitals and handling chemicals, explosives etc.  may also be considered for a special treatment.

2. Comparisons

[textmarker color=”C24000″]2.1  Should  there  be  any  comparison/parity  between  pay  scales  and  perquisites  between Government and the private sector? If so, why? If not, why not?[/textmarker]

There should be no comparison/parity between pay scales and perquisites between Government and the private sector for their functions and objectives are incomparable. While the private sector is motivated by the concept of maximization of profit, the requirement of quality  service to public without any favour is the cardinal principle of governance.    A  civil  servant  is  supposed  to  possess  the  qualities  of  being  fearless, honest,  appreciative of inherent  difficulties, non- discriminatory between one citizen and the other; sense of equality; adherence to the rules and regulations etc.

However a “fair comparison with outside wages” is a principle which has been adopted world over for determination of wages of Civil (Government) servants and therefore at least at the bottom level,   wages must be on par with   the average minimum wage obtaining in selected Private/Public sector undertakings,  subject to the condition that it should not   in any case be less than the Need Based Minimum wage determined and quantified on the basis of norms adopted by the 15 ILC.

So far as perquisites are concerned no comparison with those obtaining in Private sector is possible except in the case of House Rent/Travelling Allowances. Other perquisites in the Private sector have been granted on altogether different considerations.

[textmarker color=”C24000″]2.2 Should there at all be any comparison/parity between pay scales and perquisites between Government and the public sector? If so, why? If not, why not?[/textmarker]

Yes. For the sake of a fair comparison of wages especially in the background that some of the Government employees are called upon to perform  in a hazardous situation as mentioned in reply to question No. 1.2.

[textmarker color=”C24000″]2.3 The concept of variable pay has been introduced in Central Public Sector Enterprises by the Second Pay Revision Committee. In the case of the Government is there merit in introducing a variable component of pay? Can such variable pay be linked to performance?[/textmarker]

The concept of performance related pay structure was actually imported by the 6th CPC through the Pay Band and Grade Pay system.   In the absence of an objective measurement criterion to evaluate the performance of individual officials and groups, the innovation was flawed right at the outset.  The 6th CPC failed to recognize the fact that in Governmental set up, segmentalisation of functions into tiny units is next to impossible.  In order to make the concept workable, the organization must be capable of finalizing clear cut targets both at the individual and group levels. This being difficult in most of the Governmental organizations, it is not desirable either to continue with the  existing  system  or  import  or  replicate  what  is  done  in  the  Public  Sector Undertakings.  This apart,  it  is  pertinent  to point  out  that  most  the west  European countries, which adopted the Performance pay related scheme in civil service in the hay- days of Thatcher-Reagan era subsequently discarded it as infeasible.

3. Attracting Talent

[textmarker color=”C24000″]3.1 Does the present compensation package attract suitable talent in the All India Services & Group A Services? What are your observations and suggestions in this regard?[/textmarker]

Generally the pay package in Government service at all levels is at a low level compared to the exorbitant pay packets provided by some of the Transnational Corporation in the private Sector.   This has no doubt a deleterious impact on the quality of personnel recruited to Civil service, especially at lower levels.  Since the Group A Service officers in Civil Service enjoy enormous power, perks privileges and an incomparable job security it has continued to attract talents.  As mentioned elsewhere, while parity with the pay and perquisites with the private sector is neither desirable nor feasible, the Commission must ensure that the widening gap in this regard is taken into account as an important factor to be addressed. The element of statutory Pension is one very important and significant factor in attracting persons for Government service, which has been replaced with NPS.   Therefore, the NPS and PFRDA Act may be scrapped and statutory pension as a service condition may be restored.

[textmarker color=”C24000″]3.2 To what extent should government compensation be structured to attract special talent?[/textmarker]

Government may be required to requisition the service of personnel with special talents of professionals, Scientists, technicians   and technocrats for specific jobs.   The Commission may evolve a scheme for the recruitment and retention of such professionals ,   technocrats, technicians and Scientists with special pay packets and flexible service conditions.

4. Pay Scales

[textmarker color=”C24000″]4.1 The 6th Central Pay Commission introduced the system of Pay Bands and Grade Pay as against the system of specific pay scales attached to various posts. What has been the impact of running pay bands post implementation of 6th CPC recommendations?[/textmarker]

The Pay Band and Grade Pay system evolved by the 6th  CPC in implementation of the concept of performance related pay structure in civil service, in our opinion, brought about a chaotic Pay structure.  It did not serve the requisite purpose.

[textmarker color=”C24000″]4.2 Is there any need to bring about any change?[/textmarker]

Yes.

[textmarker color=”C24000″]4.3 Did the pay bands recommended by the Sixth CPC help in arresting exodus and attract talent towards the Government?[/textmarker]

No.

The Pay Band & Grade Pay structure has not prevented the highly qualified technocrats and professions to leave the Government in search of better career avenues in public and private sectors.

[textmarker color=”C24000″]4.4 Successive Pay Commissions have reduced the number of pay scales by merging one or two pay scales together. Is there a case for the number of pay scales/ pay band to be rationalized and if so in what manner?[/textmarker]

It must be noted that the successive Pay commissions had reduced the pay scales only at the Group C and D levels.   .   There is still scope to have further exercise in this direction where clear overlapping exists.

[textmarker color=”C24000″]4.5 Is the “grade pay” concept working? If not, what are your alternative suggestions?[/textmarker]

It is not working. We shall make our alternate suggestion in the matter in our memorandum.

5. Increment

[textmarker color=”C24000″]5.1 Whether the present system of annual increment on 1st July of every year uniformly in case of all employees has served its purpose or not? Whether any changes are required?[/textmarker]

No. In fact the single date increment system has brought in anomalies, which were discussed   at   length   at   the   National   Anomaly   Committee,   without   reaching   an agreement.   In our Opinion, the commission must recommend, for administrative expediency, two specific dates as increment dates. Viz. Ist January and Ist July.  Those recruited/appointed/promoted during the period between 1st  Jan and 30th  June, will have their increment date on 1st January and those recruited/appointed/promoted between  Ist  July  and  31st   December  will  have  it  on  Ist  July  next.  This  apart  the Commission is required to specifically recommend that those who retire on 30th june  or

31st December are granted one increment on the last day of their service.

[textmarker color=”C24000″]5.2 What should be the reasonable quantum of annual increment?[/textmarker]

The reasonable quantum of increment should not  be less than 5% of the basic pay or the rate of increment agreed upon through bilateral discussion in the Banking industry, whichever is higher.

[textmarker color=”C24000″]5.3 Whether there should be a provision of variable increments at a rate higher than the normal annual increment in case of high achievers? If so, what should be transparent and objective parameters to assess high achievement, which could be uniformly applied across Central Government?[/textmarker]

Without defining the term “high achiever” and prescribing transparent and objective parameters to assess high achievement the system of variable increments at a rate higher than normal annual increments will be misused on subjective assessment of high achievements. For these reasons and for what we have stated in reply to question No.

2.3 the scheme of   variable increment is not desirable.

[textmarker color=”C24000″]5.4 Under the MACP scheme three financial up-gradations are allowed on completion of 10, 20,[/textmarker]

30 years of regular service, counted from the direct entry grade. What are the strengths and weaknesses of the scheme? Is there a perception that a scheme of this nature, in some Departments, actually incentivizes people who do not wish to take the more arduous route of qualifying departmental examinations/ or those obtaining professional degrees?

There should be 5 financial upgradation in MACP based on   the departmental promotional hierarchy. The MACP scheme is required to be continued to motivate personnel at all levels and at all departments especially in those organizations, where normal promotional avenues are few and far between.  Normal promotions are dependent upon the availability of vacancies at higher levels.  The job requirement of certain organizations may not be capable of creating requisite number of higher level positions whereas it might need large number of personnel at lower levels.   MACP alone can take care of that specific situation.   The arduous route of career progression through examination and professional qualification, no doubt will be preferred if and if only such promotions are made available for the eligible candidates within a reasonable period of residency in the feeder cadre. Say  two to three years.

No financial benefit accrues to a person who is promoted through the arduous route of examination or  acquisition  of    professional  qualification,  when such promotion follows  the financial upgradation under MACP   Scheme.   This has to be rectified by evolving a distinctly different financial benefit scheme on grant of actual regular promotion.

6. Performance

[textmarker color=”C24000″]What kind of incentives would you suggest to recognize and reward good performance?[/textmarker]

We are against the system of incentives to reward good performance as this would only encourage favouritism and nepotism for the reasons stated to our reply to question No.2.3 an d 5.2

7. Impact on other organizations

[textmarker color=”C24000″]Salary structures in the Central and State Governments are 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. To what extent should their paying capacity be considered in devising a reasonable remuneration package for Central Govt. employees?[/textmarker]

Capacity of a Governmental organization to pay cannot be gauged only from the available  resources  but  also  its  potential  to  raise  resources.     Wages  cannot  bedetermined on the single factor of capacity of the Government to pay.  It must be noted that there are various State Governments in the country which pay better pay packets, perquisites and allowances to its employees than what is provided to the Central Government employees.  Panchayati Raj institution, Municipalities, normally follow the salary structure of the respective State Governments.  It is also to be noted that various State Governments do revise the wages of their employees once in five years.  In any case the incapacity of the government to pay cannot be a justification to deny the minimum wage to workers and the salary structure based upon that concept, especially in the background that the government is to function as a model employer. It also cannot be an excuse for denial of wages on a fair comparison of the wages existing in the society which is evolved as a product of collective bargaining of the workers. 

8. Defence Forces

[textmarker color=”C24000″]8.1 What should be the considerations for fixing salary in case of Defence personnel and in what manner does the parity with civil services need to be evolved, keeping in view their respective job profiles?[/textmarker]

No comments

[textmarker color=”C24000″]8.2 In what manner should the concessions and facilities, both in cash and kind, be taken into account for determining salary structure in case of Defence Forces personnel.[/textmarker]

No comments

[textmarker color=”C24000″]8.3 As per the November 2008 orders of the Ministry of Defence, there are a total of 45 types of allowances for Personnel Below Officer Rank and 39 types of allowances for Officers. Does a case exist for rationalization/ streamlining of the current variety of allowances?[/textmarker]

No comments

[textmarker color=”C24000″]8.4 What are the options available for addressing the increasing expenditure on defence pensions?[/textmarker]

No comments

[textmarker color=”C24000″]8.5 As a measure of special recognition, is there a case to review the present benefits provided to war widows?[/textmarker]

No comments

8.6 As a measure of special recognition, is there a case to review the present benefits provided to disabled soldiers, commensurate to the nature of their disability?

No comments.

9. Allowances

[textmarker color=”C24000″]9.1 Whether the existing allowances need to be retained or rationalized in such a manner as to ensure that salary structure takes care not only of the job profile but the situational factors as well, so that the number of allowances could be at a realistic level?[/textmarker]

The existing allowances need to be retained and enhanced. .  They are at a realistic level having been evolved by successive Pay Commission over detailed deliberations.

[textmarker color=”C24000″]9.2 What should be the principles to determine payment of House Rent Allowance?[/textmarker]

The IIIrd CPC     had recommended that Government should lay down appropriate HRA rates in different cities and town based not on population criteria, but on an actual assessment of prevailing level of rent in different cities and Towns. Alternatively, certain notional rents for different types of accommodation meant for officers and personnel of specified pay groups should be laid down for particular cities after studying the actual market  rent in that city. The house rent allowance  will have to be the actual rent payable by an employee in a particular location as reduced by 10% of basic pay being the amount factored in the computation of minimum wage.

10. Pension

[textmarker color=”C24000″]10.1  The  retirement  benefits  of  all  Central  Government  employees  appointed  on  or  after 1.1.2004 are covered by the New Pension Scheme (NPS). What has been the experience of the NPS in the last decade?[/textmarker]

We are of the considered opinion that the new pension scheme which came into existence for the employees recruited after 1.1.2004 must be scrapped.   The old statutory pension scheme as was in vogue prior to 1.1.2004 must be made applicable to all  Government  employees  irrespective of  the date of  their entry  into Government service.   The New pension scheme has in fact created a class within class amongst the Central Government employees which is discriminatory and impermissible.  It is clearly in contravention of the dictum pronounced by the Constitution Bench of the Supreme Court in Nakara Vs Union of India and therefore deserves to be rescinded.

[textmarker color=”C24000″]10.2 As far  as pre-1.1.2004 appointees are concerned, what  should be the principles that govern the structure of pension and other retirement benefits?[/textmarker]

The concept of modified parity introduced by the 5th  CPC as a measure to reduce the financial implication must be replaced with the full parity concept as was made applicable for the personnel retired prior to 1.1.1986. In other words, the pay of every

retired person must be re-determined notionally as if he is not retired and then his pension to be computed under the revised rules. This alone will protect the value of pension of a retired person.

5th  CPC in their Para 127.6 has observed, “It needs to be averred emphatically that pension is not in the nature of alms being doled out to beggars. Senior Citizens (Retired Government employees) need to be treated with dignity  and  courtesy befitting their age. Pension is their statutory, inalienable, enforceable right & it has been earned by the sweat of their brow” Hon’ble Supreme Court, in its landmark Constitutional Bench judgement dated 17.12.1982 in the case of D.S. Nakara Vs Union of India ruled –

“A Pension scheme consistent with available resources must provide (adequate pension) so that the Pensioner would be able to live

i)  free from want, with decency, independence and self respect and

ii)  At a standard equivalent at pre-retirement level.

iii) Pensioners from payment of pension form a homogenous class. Different formulae affording unequal treatment cannot be adopted to compute their pension solely on the ground that some retired earlier and some retired later.

A comprehensive scheme of retirement benefit has been suggested by the stake holders both as an agenda in the National Council meeting of JCM and the meetings of SCOVA. The Commission is requested to consider the well thought out scheme formulated in those agenda and make recommendations  to the Government, so that the pension and retirement benefits will really become meaningful for the retired employees. We shall elucidate the points in detail when we submit the memorandum to the Commission on retirement benefits.

11. Strengthening the public governance system

[textmarker color=”C24000″]11.1 The 6th CPC recommended upgrading the skills of the Group D employees and placing them in Group C over a period of time. What has been the experience in this regard?[/textmarker]

The then existing Group D employees, to the best of our understanding have all been trained, upgraded or promoted to function as skilled group C employees and they perform well  and efficiently.

[textmarker color=”C24000″]11.2 In what way can Central Government organizations functioning be improved to make them more efficient, accountable and responsible? Please give specific suggestions with respect to:[/textmarker]

a) Rationalization of staff strength and more productive deployment of available staff;

b) Rationalization of processes and reduction of paper work; and c) Economy in expenditure.

Whatever rationalization effected so far by the Government had been through an unscientific and arbitrary executive fiat like the one issued in 2001 and which was kept operative till 2009. The said exercise only reduced the staff strength drastically.  We are not aware of any rationalization or reduction in Group A cadres through this exercise even though the executive instruction covered all grades and cadres in the Government service. In fact there had been no rationalization but only reduction of manpower overburdening the existing workers and making   most of the Departments difficult to perform perfectly.     In our considered opinion, the 7thCPC must recommend to the Government to  set up a Committee in each department with experts from outside the organization, the officials from within the organization and representative of the Unions of the respective department to study the functional changes taken place over the years, especially due to the induction of modern technology the new challenges and the best way to meet those challenges,  reduction in paper work, customer satisfaction and economy in expenditure and make suggestions to the Government for their acceptance and implementation.

12. Training/ building competence

[textmarker color=”C24000″]To ensure that periodical professional training is imparted to all personnel to update the skills. 12.1 How would you interpret the concept of “competency based framework”?[/textmarker]

No comments. This in fact is a matter which must be considered by an Administrative Reforms Commission rather than the Pay Commission.

[textmarker color=”C24000″]12.2 One of the terms of reference suggests that the Commission recommend appropriate training and capacity building through a competency based framework.[/textmarker]

a) Is the present level of training at various stages of a person’s career considered adequate? Are there gaps that need to be filled, and if so, where?

b) Should it be made compulsory that each civil service officer should in his career span acquire a professional qualification? If so, can the nature of the study, time intervals and the Institution(s) whose qualification are acceptable, all be stipulated?

c) What other indicators can best measure training and capacity building for personnel

in  your  organization?  Please  suggest  ways  through  which  capacity  building  can  be further strengthened?

In our opinion in- service training is the best course for skill development.