Tuesday, October 30, 2007

Opinion : Money for nothing?

The Sixth Pay Commission will raise government salaries. What about cutting the flab?

The Prime Minister was critical of the pay packages of corporate honchos some time ago and a debate on the subject was ignited.

Now there is news that the Sixth Pay Commission has something to say about pay structures in the government sector, with the thrust being unidirectional.

Quite naturally there is umbrage, given the mindset about the functioning of the public sector.

The main objective of a Pay Commission, broadly defined, is to revise the pay structure of government employees with every decade; and the justification, among other factors, is to establish some kind of parity with the private sector.

The impact of the past Pay Commissions has been manifold — they have reduced the incentive for the better candidates interested in joining the bureaucracy, made lower level government staff far better paid than their private sector counterparts, with no accountability, and put the central and state government finances in jeopardy.

The Fifth Pay Commission, which was implemented in 1997, recommended an increase in the total benefits for central government employees, which automatically translates into higher packages for state-level employees.

When salaries go up across the board, the first victim is the fiscal deficit, as expenditure goes up with no corresponding increase in revenue.

In the private sector, pay hikes are related to profit and performance, but when it comes to the government — since there are no profits and the performance system is cloudy — there is no way to quantify the net gain.

To reduce this burden, the Fifth Commission had sought to reduce the total size of the bureaucracy by 30 per cent over a ten-year period and to abolish all unfilled positions, numbering about 350,000, in 1996.

Monday, October 29, 2007

Pensioners dharna on negative attitude of the Sixth Pay Commission

All-India Organisation of Pensioners (Civil and Military) will organise a dharna and demonstration in front of the Central Government Health Services (CGHS) Office at Kesavadasapuram from 10.30 a.m. to 12.30 p.m. on October 30 in protest against the alleged negative attitude of the Sixth Pay Commission and the Central Government.

The demands of the organisation included sanction of an amount of Rs 1,000 as interim relief to the pensioners per month and steps to improve the functioning of the CGHS Office, the organisation said in a statement here on Saturday.

Thursday, October 25, 2007

Examining the Feasibility of Performance Related Pay (PRP) in Government

The studies made by Sixth Central Pay Commission.

Pay and allowances in the Government are linked to service-incremental salary scales and promotions under different service rules. Promotions have been used as a tool to provide incentive especially at senior management levels. Pay increases are based on annual increments and the salaries depend more on length of service and grades rather than the performance of an individual employee.

The aim of the study is to examine the feasibility of working out a model whereby a base salary is attached to each post based on the conventional criterion of skills and responsibility; simultaneously, a second component is introduced that is payable as a percentage of the salary on the basis of productivity and the performance of the employees, either individually or as a group.

Terms of reference: The study should examine the correct basis of pay increases and their relation, if any, to performance and productivity of the employees; and examine possibilities of evolving a direct correlation between PRP and delivery of services to citizens/organization/other departments, as the case may be.
The study should evolve measurable, quantifiable criteria for judging performance and productivity of different grades of employees in various government organizations* depending on the nature of their work and the relationship with their users/clients.

The study should, inter alia, examine international best practices in this regard.

The study should develop a model suited to Indian conditions which is transparent, measurable, fosters accountability and is linked to deliverables.

The study should devise means by which PRP can be introduced in the Government. Specifically it should consider the following:

Should PRP be applied to all jobs and all sectors, or higher managerial positions /percentage of jobs or sectors to begin with.

Should PRP be individual based or group based.

Should specific percentages be prescribed for restricting number of posts to which PRP is given.

Team Leader Contact Details:
Prof. Biju Varkkey
Indian Institute of Management Vastrapur, Ahmedabad, 380015
Tel. 079-26324874

The conceptual frame work includes the following:
Identification of metrics for five measures of performance viz.
(i) Competency/ skill
(ii) Effort /activity
(iii) Result/ output/ value added measures
(iv) Efficiency/ productivity, and
(v) Quality/ customer satisfaction.

Suggesting Modified Pay structure having flexibility to implement PRP viz. Pay structure having fixed and variable components with variable component linked to performance measures.

Suggest enabling conditions for PRP.

The Ministries/ cluster of Ministries selected are:
Cluster I
Ministry of Health & Family Welfare (D/o Health & Family Welfare)
Ministry of Urban Development (D/o UD & A)

Cluster II
Ministry of Corporate Affairs
Ministry of Finance (D/o Revenue, Central Board of Direct Taxes and Central Board of Excise and Customs)

Cluster III
Ministry of Science & Technology (D/o Science & Technology)
Ministry of Communication & Information Technology (D/O Telecommunications-Posts)

Ministry of Defence (D/O Defence and Ordnance Factories)

Ministry of Home Affairs (D/O Home Affairs)

Ministry of Railways

Tuesday, October 23, 2007

Sixth pay commission : The new rumors

Here are some talks hear on street on sixth pay commission. These are only rumors and not heard from any reliable sources.

  • The commission is to submit report by January 2008
  • Provision for extending service of professionals
  • Technical employees retirement age may increase to 65 from 60.
  • Deputation between Government and Private Sector can be possible.
  • Performance based incentives (not pay) to be introduced.

This topic is meant and open for discussion and you are welcome to post any such talks in the comments.

Monday, October 22, 2007

New Pay Scale Calculator as per sixth pay commission

Find the excel sheet for New Pay Scales / Arrears as per the sixth pay commission Here

Sunday, October 21, 2007

Election on the horizon. What does it mean?

With the stand off between the UPA and the Left continuing, the political parties have begun the preparations for the elections to the parliament. The question is how the situation help employees. In general the elections are not in national interest. It will cost a lot to the exchequer.

But the election mean a lot of hope to the government employees who are expecting the sixth pay commission report. In India, an impending election is nearly always a trigger for populist fiscal spending. And considering the huge size of employees - 3.3 million and their dependents, its not easy to ignore the demands made by them.

"Early elections could even prompt announcement of some recommendations ahead of schedule," JP Morgan economists wrote in a note last week on sixth pay commission.

Party sources have already said the government had instructed the Sixth Pay Commission to expedite the process of finalising increased salaries and allowances for the 3.3 million central government employees by December.The announcement was originally to be made by April next year. And it is expected the government will to woo the voters.

The center has already started rolling out the sops. The limits for the bonus eligibility has been raised. Those with salaries up to Rs 10,000 will be eligible for bonus, as will countless construction workers who do not have the right to such payouts. The cabinet on October 1 cleared amendments to the Payment of Bonus Act, 1965, to bring more workers into the bonus fold, extending the law to a part of the unorganised sector by including those involved in construction.

Thursday, October 18, 2007

Sixth Pay Commission Report in December?

Due to the prevailing political uncertainty the central government is poised to unveil a string of welfare measures which some Congress sources say may be a way of preparing for elections despite announcements to the contrary.

Party sources said the government had instructed the Sixth Pay Commission to expedite the process of finalising increased salaries and allowances for the 3.3 million central government employees by December.

The announcement was originally to be made by April next year.

Due to elections preparation, central government may give better rocommendations and want earlier report of sixth pay comission.

Employee may get increase of 100-150 % increase in their basic pay that may result in arround 35% increase in total salary.
And so that lowest Group - D , employee's salary crosses 10000 Rs. monthly
And highest beuracrate cabinet secratary's salary reaches rupees 100000 ( one lack) monthly.

Secrataries may get double salary.
Child education allowance may increase.
HRA may get increase from 30 to 45 %.
Pay scales may cut down to 19 from 38.
Retirement age may increase to 62 from 60.
Technical employees retirement age may increase to 65 from 60.
Deputation between Government and Private Sector can be possible.
Government holidays/leaves may cut down.
Working days can be 6 day a week from 5 day week job.

Central, state govt employees to strike work on Oct 30

Central and state government employees will go on a nation-wide strike on October 30 in support of their charter of demands.

The strike call has been given by the Confederation of Central and State Government Employees Associations and more than one crore employees would be on strike, organising secretary of the Confederation M Durai Pandian said.

The government should pay an interim relief of Rs 1,000 per month to each and every central government employee pending submission of the Sixth Pay Commission report, Pandian told reporters here today.

The relief should be available retrospectively from January 1, 2006, he added.

Staff and employees coming under the categories of 'B', 'C' and 'D' in both the Central and State administrations would observe the strike.

The strike is also aimed at persuading the Centre to raise the interest rate for the General Provident Fund and small savings and restoration of status quo ante without delay.

The trend of outsourcing government jobs involving contractual systems, downsizing departments and ban on creation of new posts were some of the 'disturbing features of the Centre's policy' and the strike would resist this.

Employees should be granted right to strike and trade union rights should be available as statutorily recognised privileges, Pandian said.

A prior notice of the strike had already been serviced on the government, he said adding, Central and state government pensioners had extended support to the call.

Wednesday, October 17, 2007

6th pay panel set to outdo 5th

An article that came in Business Standard
Some grades could be merged, likely pay figures after 6th Pay Commission are assumptions.
The Sixth Pay Commission is likely to significantly raise basic salaries for an estimated 4.5 million central government employees.
The recommendations are expected to be submitted in January, a few months ahead of schedule, and the award is likely to come into effect from January 2006.
If salaries are revised to this extent, a central government secretary could see his or her salary go up to around Rs 75,000 – exclusive of other allowances and perks, approximately 36 per cent of current total salary.

(GoI & equivalent 
5th Pay
2004 revision 
(50% hike) and 

DA at 41 % 
from 6th Pay
Secretary 26000 fixed 54990 75000
Addl secretary 22400-24500 47376-51817 64512-70500
Joint secretary 18400-22400 38916-47376 52992-64512
Super time scale 12000-18300 25380-38704 34560-52704
@ Employees also get City Compensatory Allowance, Transport Allowance, or transport. HRA is at 40 % of basic pay
@ Some grades could be merged, likely pay figures after 6th Pay Commission are assumptions
* This could be the fixation as on 1 Jan 2006, DA installments due after this date (twice a year) will be in addition and calculated as a % of this basic pay.

The Fifth Pay Commission had raised salaries by around 30 per cent from January 1996 in line with previous awards. However, this was not commensurate with private sector salary increases.
In 2004, the government raised the basic salary by 50 per cent, but the key pay scales remained unchanged.
An additional dearness allowance of 41 per cent is given on this revised basic pay.
Sources said the house rent allowance could also be increased. However, the Commission may cap the rent in grade A-plus cities – Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad.
Sources added that along with pay increases, certain designations at lower levels of the government hierarchy may also be changed to make them more market-oriented.
It is not yet known whether the January report would be the final award or an “interim relief”, which is one of the Commission’s terms of reference. A government official in the know said there would not be an interim report.
When contacted, a Commission official said, “We are not seeking an extension. We will submit it on schedule.”
The Sixth Pay Commission, headed by Justice B N Srikrishna, was constituted last October.
The official added a final decision had not yet been taken on making the award effective from January 2006.
The Sixth Pay Commission, headed by Justice B N Srikrishna, was constituted last October. It comprises Sushama Nath (member-secretary), Ravindra Dholakia and J S Mathur.
The Fifth Pay Commission, which submitted its report in January 1997, had resulted in the government’s salary and pension burden increasing from 1.6 per cent of GDP in 1996-97 to 2.3 per cent by 1999-2000. For states, employee compensation rose from 3.8 per cent to 4.7 per cent.

Tuesday, October 16, 2007

Unions play safe on new pay plan

Major unions such as the CPI(M)-affiliated CITU,  AITUC of the CPI, INTUC (Congress) and BMS (Sangh Pariwar) on Monday said they would react to the  Sixth Pay Commission’s recommendations only after getting “authentic” information.

There have been lot of report on media about the new pay scale

The BMS and CITU said they are not happy with the hike recommended for Class IV staff. CITU president and CPI(M) politburo member MK Pandhe  refused to comment before studying the recommendations, but said:  “If what media is saying is true, the Class IV staff has been given a raw deal.”

AITUC president Gurudas Dasgupta said: “Let there be a report from the panel. All the stories published in the newspapers are not correct.”

INTUC president Sanjiv Reddy denied that the recommendations have been finalised. He said the pay panel will announce the hike around December-January.

Monday, October 15, 2007

Nod from finance ministry key to pay scale reform

NEW DELHI:  The Sixth Pay Commission, chaired by former Supreme Court judge BN Srikrishna, who also carried out the inquiry into the 1993 Mumbai riots, was originally expected to submit its report in April next year. But sources indicate that the Commission is speeding up the work in the light of the uncertainties surrounding the longevity of the UPA government.

A crucial step in finalising the new pay structures for the central government employees, is the nod from the finance ministry for the proposals. The ministry has to study the proposals to see if they are financially viable, and come within a reasonable fiscal discipline for the government. And, most importantly, it has to assess if the further drain on the exchequer can be managed when similar revisions are carried out in states and public sector units.

This is particularly relevant in the context of the problems faced with the Fifth Pay Commission, whose recommendations were partially implemented in 1998. The commission had recommended the linking of government salary increases to reductions in the number of government employees. It had suggested a reduction in government strength by 30% in 10 years. Normally there is a 1.5% attrition annually because of retirement, deaths, etc.

Prof Suresh Tendulkar, member of the previous pay commission says, “We need to rationalise the departments. The Government needs to expand in some directions, while reduce in others.”

“We have to stop this “escalator promotions”. There is an overcrowding in IAS, especially at the joint secretary ranks,” says Tendulkar.

Sixth pay commission will have no bonanza for babus

An  article that came in Daily News and Analysis

NEW DELHI: For over four million government employees, including military personnel, the Sixth Pay Commission may not usher in a dramatic new era where salaries are more in tune with skyrocketing wages in the private sector.

DNA has procured details of the draft salary structure that is now under discussion between the commission and the finance ministry. These indicate that even at the top-most level — the Union cabinet secretary — the fixed salary will be just about Rs80,000 per month, up from Rs30,000 earlier.

As head of the Indian bureaucracy, the cabinet secretary notionally runs India’s largest corporation of almost 3.3 million people, excluding over a million men in military uniform. His proposed salary wouldn’t be a patch on CEO salaries in the corporate sector, where annual compensation packages run into crores of rupees for even medium-sized companies.

At the bottom of the totem pole, starting salaries for Class IV employees would rise from a basic of Rs2,550 to Rs6,500 — which is the new minimum pay for anybody working in government (see table of proposed pay structure, page 24). And the jump is not as high as it seems since the new basic salary would absorb the earlier dearness allowance (DA).

DNA has learnt that the commission, headed by retired Supreme Court judge BN Srikrishna, author of the report on the 1993 Mumbai communal riots, has been forced to water down its proposals after discussions with the finance ministry showed the financial burden may be too heavy for centre and states.

The last pay commission had called for increases in pay linked to a reduction in the size of the government. It had suggested a 30% cut in total government strength over 10 years, given an annual attrition rate of around 1.5%.  This has not happened.

“There has been no effort at downsizing the government. The recommendation that salary hikes be linked to a reduction in the number of employees was never accepted, and we are left with almost similar numbers,” says an official privy to the current pay commission’s proceedings.

Says Suresh Tendulkar, eminent economist and member of the last pay commission: “It is necessary to pay better salaries at higher levels. But to do that you have to reduce the number of posts in the higher ranks. Only then can you reduce the numbers below.”

Sunday, October 14, 2007

Sixth Pay Commission to recommend hire on contract

A report that came in Asian Age on 13th October 2007 on the 6th CPC

New Delhi, Oct.12: The Sixth Pay Commission headed by Justice B.N.Srikrishna (Retd) plans to recommend to the government that it hire bureaucrats in future on a contract basis in order to increase the efficiency of the administration.

The commission, whose recommendations are, however, not binding on the government, is expected to submit them formally by March or April next year.

Justice Srikrishna, when asked if he was advocating a "hire-and-fire" policy for senior government officials, said: "Why not? If you want to end the security of tenure, then such an alternative (contractual approach) needs to be examined. It is a logical corollary that needs to be looked at."

Justice Srikrishna said there was a "dire need" to develop "a sprit of competitiveness in governance in order to end the prevailing 'mai baap' attitude." In a no-holds-barred interview to this newspaper, he added: "We believe a bureaucrat's salary must be related to his performance. If he performs well, he must be rewarded; if not, he should be taken to task. As the Indian Navy says, 'Shape Up or Ship Out'. We are at present working out the parameters of how such a policy can be implemented."

The Pay Commission chairman said there was need for a complete overhaul of the entire administrative system. "We are studying the whole issue of the extent to which excessive security of tenure has affected government servants at all levels. The Administrative Reforms Commission has also looked into this at considerable length. When departmental action has to be taken against a bureaucrat, the matter will drag on interminably for years and years."

"The question to be asked is: why does a private company provide results, whereas this is not the case with the government? We keep talking about making India a superpower with growth rates exceeding nine percent. To bring this about, every aspect of the nation needs to gear up to achieve these results. We cannot have a BMW engine attached to a khattara gadi. I am an optimist. Yeh kyoon nahi ho sakta hai?" He said he was not suggesting that all government employees be hired on a contract basis: this was only for officials at a senior level. "I am not suggesting that all government jobs be made contractual. All I am emphasising is that jobs up to a certain level must remain contractual," Justice Srikrishna said. "This will help translate into more discipline, more conscientiousness and extreme accountability from government employees. The employee must be able to account for every rupee that the government spends. The public is fed up of government servants being paid more and more for non-performance," he said. Justice Srikrishna denied that government pay scales were going to be put at par with private sector salaries. He said: "Boys coming out of school are getting salaries of over Rs 1 lakh per month and more. We have to look into this whole issue to see how much parity we can achieve." He also denied that there were plans to give government secretaries annual pay packages of over Rs 1 crore and more. "I don't think too much credence should be given to rumours. All sections are demanding substantial increases in salaries." He said: "We have to keep in mind the financial implications of our recommendations. There is no point in our recommending an increase of Rs 50 when all that the finance ministry can afford is Rs 10."

Justice Srikrishna agreed that an increase in salaries at the Centre was bound to have a ripple effect on state governments as well. "The exact proportion (of the increase) would vary from state to state. But it must be remembered that our recommendations are not binding on the states, in fact they are not binding on the Central Government-it is within their discretion to accept or reject" he said.

If government employees have contract jobs, how will they be entitled to pension benefits? Justice Srikrishna said: "Persons on contract would be entitled to a higher compensation package and not pension for the contractual period. Those employes prior to 1.1.2004 would continue to get pensions, while those employes prior to 1.1.2004 would continue to get pensions, while those employes on or after 1.1.2004 would be governed by the New Pension Scheme".

Justice Srikrishna said he did not want the Sixth Pay Commission to become one more ritualistic exercise to dole out more money to government employees, particularly since a huge chunk of government revenues were being spent on salaries.

"It is regrettable that what is being spent is being inefficiently utilized. Leakages must be stopped at all cost. If the citizen gets every rupee's worth, then we are working towards having an ideal government," he said.

Saturday, October 13, 2007

Amar Ujala Report on sixth pay commission report

These days Newspaper across the country, publishing News item about Six Pay Commission and its recommendations. Speculative reports about how much increase in the pay of the Central Government Employees will be as well other allowances and other effects are being continuously published. After Deccan Herald and Malayala Manorama in Kerala, its now turn of the Hindi News Papers Amar Ujala and Rajasthan Patrika. Amar Ujala has published a special report yesterday and Rajathan Patrika has published article on the same line today. These News item in Hindi News Papers only confirm various information already in the circulation among employees. Some of the Fine prints of the reports are :
Retirement Age is going to be 62 years
Basic salary will be increased by 100-150%
Net effect will be 30-40% only
Lowest salary will be more than Rs.10000
Government has asked the commission to give its report early
Child Education allowance will be Rs.200-300
HRA increased by 15% i.e. 45%
Less Government Holidays
Six day week office working
Pay of Cabinet Secretary will be One Lac

Till final report comes, you will see more and more such News Items in various news paper.

Read Amar Ujala news article Amar ujala

Friday, October 12, 2007

Pay Commission Denies reports on "interim report"

The Pay Commission has denied the submission of any interim report to the Government on pay scales and other issues as has been reported by a section of the Press। The new pay scales has been posted on many of the regional News papers and transalted version posted in this blog ( The denial has come on 10th October, 2007. The denial has been posted in commission website.

Disclaimer : Reports have appeared in a section of the media that the Sixth Central Pay Commission has submitted interim reports and some newspapers have even published replacement scales supposedly recommended by the Commission. It is clarified that the Commission has not submitted any interim report or recommendations. It may be recalled that the Commission was notified on October 5, 2006 and is expected to give its report within the stipulated time of eighteen months.


Space, atomic energy department chiefs retirement age increased to 66

The union cabinet Thursday gave the go-ahead for a four-year extension in service to the chairman of the Space Commission, the Atomic Energy Commission, and the secretary, Department of Space and Atomic Energy, from the present age of 62 to 66.The cabinet would make the necessary amendment soon, Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters.The extension is in the interest of the public and would ensure effective implementation of the plans and programmes of vital national importance in the field of space application and atomic energy, he said.The cabinet also approved rewarding scientists and engineers for excellence, enhancing their housing facilities, and giving them the necessary promotions as a means to encourage them.'The approved career attractions will benefit the Department of Space and Department of Atomic Energy to attract and thereafter retain scientists and engineers,' the cabinet said.

Thursday, October 11, 2007

Group ‘D’ staff to join nationwide strike

The Puducherry Government Group ‘D’ Employees (central) Association on Wednesday announced its decision to join the proposed nationwide strike called by the Central trade unions and the Confederation of Central Government Employees Union to highlight their demands.

Addressing reporters here, general secretary of the association G. Madhialagan said the association leaders would hand over the strike notice to the authorities on October 17 after staging a demonstration in front of the Chief Secretariat. The association demanded an interim relief of Rs. 1,000 pending recommendation of the Sixth Pay Commission, implementation of the earlier pension scheme and to stop appointment of private security guards in government departments. The association wanted the government to fill the posts of record keepers in various departments.

Babus want pvt sector salary with govt perks

An articlke that came in Business Standard

Officers of the elite Indian Administrative Service (IAS) want their pay scales to be determined on the basis of prevailing market rates, quite like what happens in the private sector.

However, they are not ready to give up the substantial perks they enjoy, like palatial bungalows in city centres, number of attendants, guards, drivers and other assorted facilities.

In its reply to a questionnaire from the Sixth Central Pay Commission, the Delhi-based Indian Administrative and Civil Service (Central) Association has said, “The basic pay of a Secretary to the Government of India should be such that he can afford to take at least one international private trip per year with his family and travel long distances within the country for social cause, without seeking any obligations or favours from any private or other agencies.”

The Commission is in the process of finalising its recommendations on pay hikes for central government employees. Its report is expected by March next year.

The association has held that higher salaries would keep the morale of IAS officers high and motivate them to perform their duty more diligently.

IAS officers are at the top of the government’s salary structure. Non-IAS officers take more time to reach similar levels of responsibility and are paid lesser in comparison.

However, babus are not ready for any cut in their perks or accept posts on a contract basis.

In response to the Commission question on whether it is possible to quantify other additional perks enjoyed by IAS officers, like security of tenure, promotional avenues, retirement packages and housing, the association said, “There is no need to compare the perks provided to a civil servant in view of the unique and complex nature of public service which is entirely different.”

Analysts, however, feel that IAS officers cannot have their cake and eat it too.

“Secretary-level officers get on a par or even more than a person with similar experience in the corporate sector, when one takes into account the additional perks they enjoy. At a prime location like Chanakyapuri in New Delhi, the rent of the bungalows they reside is not less than Rs 3-5 lakh per month,” said Amit Azad, head of operations and finances at HR consultancy Finesse PR.

However, Azad agreed that civil servants do not have the same savings (and investment) potential as compared to persons with equal experience in the private sector.

“Hence, they do not enjoy the same lifestyle when they retire,” he added.

The Sixth Pay Commission was constituted last year by the United Progressive Alliance government. It is chaired by Justice B N Srikrishna.

Tuesday, October 9, 2007

What kind of a pay raise can we expect out of the Sixth Pay Commission?

About 35 percent! The Deccan Herald report quotes "sources familiar with the draft recommendations," so this estimate is speculative. But it's also in line with our experience with the previous Pay Commission.

As per a draft recommendation prepared by the Pay Commission, gross salary increases which would be implemented with retrospective effect from January 1, 2006, would be in the range of 30 to 35 per cent of the existing salaries.

According to sources familiar with the draft recommendations already prepared by the Pay Commission, the basic salary of the Cabinet Secretary — the topmost civil servant of the Government of India — is proposed to be Rs 80,000 as against the existing basic pay of Rs 30,000.

Coming back to academic salaries, a fresh recruit at the Assistant Professor level can expect a gross salary (without house rent allowance) of about Rs. 35,000 from the current Rs. 25,000. Clearly, this sort of raise, while it does have its benefits (!), is nothing to write home about. Our premier institutions had better get cracking on some of the other things we talked about just a few days ago, if they want to remain (become ?) attractive destinations for top faculty talent.

Left opposes performance-linked salaries

Yet another idea mooted during the United Progressive Alliance government — to introduce performance-linked salaries for government employees — has raised the hackles of the Left-backed trade unions.
Reacting angrily, the unions said any move to this end would hurt the interests of employees at lower levels of the hierarchy.
“The proposal of performance-linked salary for a government employee is illegal, illegitimate and unconstitutional. Basic salary cannot be linked with performance. There can be a performance bonus, as prevalent in some industries, but that should not be a part of the salary,” said Gurudas Dasgupta, general secretary, All-India Trade Union Congress (AITUC), which is affiliated to the Communist Party of India (CPI).
However, even as the Left-supported trade unions expressed strong opposition, the Congress-linked Indian National Trade Union Congress (INTUC) supported the idea.
The Sixth Pay Commission is examining the feasibility of introducing performance-linked pay in the government.
The commission has constituted a study group headed by Indian Institute of Management-Ahmedabad Professor Biju Varkkey to develop a model that would link the pay package of central government employees to their performance. The commission’s award is expected by March next year.
The president of CPI(M) trade wing Centre of Indian Trade Unions, M K Pandhe, said the idea would not help government employees in the lower levels of the bureaucratic hierarchy.
“Performance-linked salary for government employees does not hold any meaning. This will be subject to high distortions, as the performance will be judged by the top officials who are always biased against lower grade employees. This is also against the minimum wage guaranteed by the Supreme Court. In the name of such a system, the government wants to give better pay packages to senior government officials. Salaries of government employees should be determined on the basis of the cost of minimum standard of living and capacity of the government to pay.”
However, G Sanjeeva Reddy of the Congress affiliated trade union, INTUC, cautiously welcomed the proposition.
“We support the proposal, provided that minimum wage is guaranteed for central government employees. However, this issue should be discussed with the central government employee associations and progress should be made on the basis of the consensus. Otherwise, it will lead to a lot of controversy because it has been proposed for the first time,” he said.
“This could be implemented for the middle- and top-level government employees,” Reddy added.
When asked whether senior government officials should be paid on a par with their counterparts in the private sector, Reddy said, “This is neither possible nor desirable as more than 26 per cent people in this country live below the poverty line. We cannot compare salaries of government employees with the private sector employees as the latter work only with profit motive whereas the government has to fulfil certain social obligations. However, nobody should be punished for working for the government. They should be paid proper salary with respect to their skill and responsibility.”

Monday, October 8, 2007

"Shape Up or Ship Out" - Will the Sixth Pay Commission have shocks for Indian 'Babus'?

From what the Chairman Justice B N Srikrishna has stated in an interview to Gfiles, the magazine, exclusively devoted to the 'Babus', it looks as if the Indian bureaucracy may have shocks when he submits the Sixth Pay Commission Report next April.

Justice B N Srikrishna, who is nationally known as the head of the Court of Inquiry of the Report on the 1992 Bombay riots, has told the Gfiles that his message to the Government of India civil servants is to "Shape Up or Ship Out". That would be his "Mantra" in preparing the Report.

He has the terms of reference to go by in preparing the Report: focus on 'good governance' which will seek to 'spruce up' to provide cutting edge administration. He hopes to rationalize existing pay structures and work out a pay package that will promote efficiency and productivity.

Please do not bank on automatic increase in scales. He is keen on "performance related incentives" that are over and above the pay. "All future growth should be attributable only to better end results with non performers being denied any growth. Shape up of ship out is our mantra".

Justice Srikrishna says that the government can "adopt a contractual approach for hiring of government employees for specific jobs at certain levels. He feels that the "spirit of competitiveness in the world of trade and commerce must be introduced in governance."

Will the Babus get the salaries that the private sector offers? He is keen to keep the financial implications of the recommendations in mind. He does not want to disturb the "comfort level" of the Finance Ministry, and says: "There is no point in recommending an increase of Rs 50 when all they can afford is Rs 10."

Justice Srikrishna also says that his job ends the day he submits his report. How the government puts the recommendations into action is "not any concern of mine", he says.

When asked about the kind of tactics used by his team, he said, "We believe performance should be incentivised."

"The approach of this commission is that most of the growth in emoluments should come in the form of performance-related incentives that are over and above the normal pay," he added.

"Any growth in the compensation should come on account of better productivity. All future growth should be attributable only to better end results with non-performers being denied any growth. We are at present working out the parameters on how such a policy can be implemented," he added.

When asked about is the Commission going to advocate a hire and fire policy for government employees, he said that the term of appointment of existing employee cannot be changed to their disadvantage, adding that "What the government can do is to adopt a contractual approach for specific jobs at certain levels."

The Commission, besides looking into the pay structure, allowances and other benefits of the Central staff, has also been directed to recommend new pay structures for personnel of the armed forces and officers and employees of regulatory bodies set up under Acts of Parliament.

When asked that most of exchequer money spent on paying salaries, he said, "The exact proportion varies from state to state. As per the information available with us, out of 20 states following the Central pay scales, 14 are in a comfortable fiscal position."Commenting on government pay scale vis-à-vis private sector salaries, Justice Srikrisna said that it would not be possible to match private-sector salaries.

"Boys are coming out of school are getting salaries of over Rs 1 lakh per month and more. We have to look into this whole issue to see how much parity we can achieve," he said.

When asked about if government employees have contractual jobs, then how will they receive pension benefits, he said that person on contract would be entitled to a higher compensation package and not to pension for the contractual periods.

"For employees appointed prior to January 1, 2004 will continue to get pension. Those recruited after this date is covered under the defined contributory pension scheme," said eminent jurist

Sunday, October 7, 2007

New Pay Scales recommended by Sixth Pay Commission

The new pay scales as provided in Malayala Manorama.
Please note that there may be some mistakes as the chart provided in the daily was not very clear


Old Scale

New Scale






Auxiliary Staff- Gr D










2750-70-3800-75-4400 (C)



Supporting Staff – C












5000-150-8000 C/B N/G



Supervisory Staff, B/NG


5500-175-9000 C/B N/G


6000-190-9800 C/B N/G




6500-200-9800 C/B N/G


6500-200-10500 C/B N/G


6500-200-10500 B GAZ




7450-225-11500 B G/NG & C








Asst. Officer B


9000 (Fixed)










































60000 (Fixed)





65000 (Fixed)





70000 (Fixed)

A Secy




25000 (Fixed)


75000 (Fixed)



30000 (Fixed)


80000 (Fixed)

C Secy

Pay Commission Recomentations

Today one of the leading vernacular dailies of the country - Malayalam Manorama also published the recommendations of the sixth pay commission. Most of the recommendations are same as that cam in Mathrubhumi last week ( ).

It says that the commission had recommended to make the minimum basic scale as 8500-275-11,800. But the Finance ministry didn't accept that. Following this  the commission recommended for 8000 as minimum basic, which was also not accepted by the ministry. As per the initial recommendation the pay scale Cabinet Secretary was 1,25,000 which was not accepted.

The main points in the recommendations are

  • The number of pay scales would be reduced from existing 38 to 16
  • After implementation from 2006 Jan to Dec, no DA will be given. DA will be given from 2007 Jan
  • The retirement date of the employees will be unified as on Dec 31 irrespective of the month they joined.
  • The increments for all employees will be given on January. A notional increment will be given for every 3 years of service. An employee will be eligible for a maximum of three such increments
  • 10pc of basic will go to PF
  • HRA - A1 cities 30pc of basic subjected to a maximum of 12000. B 1 and 2 15pc (max 8000). C 7.5pc(max 3000) Unclassified 5pc(max 2000)
  • CCA - A1 4pc(max 1200), A 3pc(max 900), B1 2pc(max 600), B2 1pc(max 300)
  • Insurance premium to be paid by different groups : A -40, B-200, C-100, D-50
  • Pension age to stay at 60. Maximum pension - 50pc of last salary (max 40000). Family pension -30pc(24000)
  • Leave encashment - 360 days
  • Commutation - 40pc

Saturday, October 6, 2007

Pay Commission mulls pay for performance

IIM-A group to study feasibility of new salary model.
The sixth central Pay Commission is examining the feasibility of introducing performance-linked salaries for government employees.
The commission has constituted a study group headed by Indian Institute of Management -Ahmedabad Professor Biju Varkkey to develop a model on these lines.
The study group has submitted interim reports and was expected to send its final report soon, a Pay Commission official told Business Standard. The group is expected to evolve a system of linking performance-based pay to the actual delivery of services to citizens.
Declining to reveal details of the interim findings, the official added that the Pay Commission’s report will be submitted next March, slightly ahead of the original deadline of April 2008.
Performance-linked pay is a marked departure from the present practice. If implemented, it will align government pay more closely to corporate sector compensation practices.
Pay increases for both central and state government employees are currently based on annual increments, and salaries depend more on length of service and hierarchy than annual performance.
The Varkkey group has been asked to work out a model in which a base salary is attached to each post based on the conventional criteria of skills and responsibilities.
A second component of salary could be introduced that pays a percentage of the basic salary based on performance and productivity. This could be determined either individually or as a group.
The group has been asked to evolve measurable and quantifiable criteria for judging performance and productivity of different grades of employees in various government organisations depending on the nature of their work and relationship with their clients.
The study is also expected to consider international best practices. It will also suggest whether performance-related pay should be applied to all jobs in all sectors or to higher managerial positions in certain sectors to begin with.
The sixth Pay Commission was constituted last year by the United Progressive Alliance government. It is chaired by Justice B N Srikrishna. The award of fifth Pay Commission, which was set up in 1994 and implemented in 1997, was widely blamed for setting back central and state finances.