12014/1/8/NDMA                                                       
                                                 17 Apr 2008

ADVERSE IMPLICATIONS OF SIXTH PAY COMMISSION

REPORT FOR THE ARMED FORCES 

1.       Last week I had gone to Amritsar to attend a Regimental function.  I was surprised to note the intense disappointment and despondency in all the jawans, officers and their families as they spoke vociferously about how let down they felt with the Sixth Pay Commission report (PCR).  The Services Chiefs have already met the Hon'ble Raksha Mantri and expressed their deep concern.

2.      As a Former Chief, I feel morally duty bound to bring this fact to the notice of the Hon'ble Prime Minister in my personal capacity.  I take heart from the fact, that it is under your leadership, that, in my
tenure, the Government went for a major improvement in the "Operational Posture by sanctioning South Western Command and 9 Corps HQs with full complements and also for some restoration of self esteem of the young officers through addressing their delayed promotions-cum-service conditions, by approving Part 1 of Ajay Vikram Singh (AVS) Committee report".  If this had been followed up, through a balanced PCR and implementation of Part II of the 'AVS Report', things would have reasonably improved, but unfortunately the very opposite has happened.

3.       The PCR has hurt the Armed Forces on the following major  accounts :-

(a)    Military Service Pay (MSP) - (X Factor).   The Military Service Pay which has now been introduced, is intended to compensate service personnel for intangible difficulties and risks,  which  they  experience  during  their  service  careers.  While this is a welcome step, the Jawans who face the greatest privations, have been given a paltry amount of Rs 1000/-.  As recommended by the three services to
the Ministry of  Defence,  this compensation be fixed in the following manner;

(i) for  the jawans and Junior Commissioned Officers (below Lt rank), MSP should be 62.5 percent of their basic pay

(ii) for officers,MSP be fixed at 56.5 percent of basic pay.

(iii) since, there is no justification for excluding Maj Generals and Lt Generals from this pay (just 300 in number), they should also be included. 

(iv) Lastly, as these difficult service conditions have been existing all along, the arrears must be paid wef 01 Jan 2006, as in the case of other recommendations of the Pay Commission. All these recommendations have already been made by the Defence Services.

 (b)    Depressed Pay Scales and Lowering of Status of Officers.  

(i) In determining the grade pay of officers of the rank of Brigadiers and below, the Pay Commission has excluded the rank pay, from the scale of officers, on the ground that rank pay is an element of Military
Service Pay now proposed.  The exclusion of the rank pay from the pay scale has led to depressed grades of pay and lowering  'Services' status in different ranks by one rung below the extant position.  This
will cause immense functional problems not only for inter-se functioning vis-a-vis the civilian/police counterparts etc but also within the Armed Forces, wherein a large number of civilians are working.  

(ii)  The Pay Commission has upgraded the DsG of certain police forces and certain specific posts in other civil services.  It is important to note that (i) Lt Generals and equivalent comprise just 0.13% of the Services Officer Cadre as against at least fifteen - twenty times more posts at that level in civil/police
services and more than a hundred times in the IAS.   Furthermore, the creation of posts of Special Secretaries like the earlier Additional DGP will further upset the entire status equation. The promotions in the Services are achieved (if one escapes the most extraordinary degree of supercessions) with  much longer service.  For example at the lower level, a Brigadier is promoted after 28 years service and a Major
General with 33 years service, whereas their counterparts (in non-military services) get these promotions with 14-16 and 20 years service resulting in huge disparities.  The service officers thus suffer both on account of status and total take home salary to the tune of 30-40 lakhs and more.

(iii)    In order to restore parity, I, therefore, strongly recommend that :-

(aa) ideally, the rank pay should be restored or in the very least, grade pay be linked to the length of service equivalent to that of the IAS, since the promotions in services are much slower and; 

(ab)   For protecting the status equation of 'Lieutenant Generals' it is recommended that they must remain above DsG of Police forces and equivalent to five DsG of the PMF.  It may be mentioned that
in the Warrant of Precedence, all 'Lt Generals' have been placed in Article 24, whereas, DsGP are in Article 25.  Hence, any disparity in pay structure will lead to an anomalous situation.  Similarly, the
status equations finalized in the Fifth Pay Commission for all levels must be maintained. Any further erosion of status will undermine the military leadership in the eyes of their own subordinates.

 (c)    Introduction of Running Pay Band and Adverse Impact on Junior and Middle Piece (Majors to Colonels) and Brigadiers level Officers.  The new scales now introduced have hurt officers of these levels very badly and are resulting in virtually negligible benefits amounting to just 10 percent or so.   This aberration is likely to start a trend of resignations of large number of officers, in these ranks soon on
completion of the mandatory minimum 20 years service.  I gather that already more than approx 650 officers have been waitlisted for premature release. The Services which are already heavily undersubscribed cannot sustain this exodus.  One additional pay band is required to be introduced here to ensure suitable benefits to officers at all levels.  There is, thus, a need to have two pay bands, one
between Lt to Lt Colonels and the other between Colonels to Brigadiers with suitable raise linked to the length of service.

 (d)   Lateral Shift and Assured Second Career for Men- 'A Myth'.  The Pay Commission recommendations for the Services hinge, largely, on the successful implementation of the lateral transfer of the service
personnel, into the PMFs/Central Police Organizations (CPOs).  Thus, these recommendations have been "based on and got eroded" in the garb of a possible future lateral shift and assured second career.  The
scheme of lateral transfer, if not implemented or delayed, would negate the most core underlying concept/assumption of these recommendations.

 I may submit here, that this particular recommendation has been attempted for implementation for decades (included in the Fifth Pay Commission Report also) but with No success earlier.  Nor will it
succeed in future for the obvious reasons.  All the Pay Commission recommendations thus need to be re-examined in the absence of this basic assumption of lateral transfer.  The lateral transfer was also
considered earlier actively and dropped, when I was the Vice Chief.

(e)     Safeguarding of Interest of the Pensioners.  Over the past two decades, the Govt has been able to achieve some parity in the pensions of the current and past retirees.  'One rank one pension' was more or
less achieved for the men, and in the case of officers, some minimum parity was brought in by grant of pension at the bottom of scale of the rank in which they retired.  However, with introduction of running pay bands and the absence of top and bottom of the scales for any rank, the parity with specific bands, achieved over some time now, will be lost.

 There is, thus, a need to protect the interests of the past retirees by suitable modifications and thereby ensuring enhanced pensionary benefits to the tune of minimum 30%.'Anomalies Committee' is Unlikely to Succeed in Addressing the Grievances of the Armed Forces

4. I have read in the media that an Anomalies Committee has been set up to look into the issues raised by everyone.  This will not solve the problems of the Armed Forces for two reasons :-

(a)    The Lack of Sensitivity/Understanding.  This Committee, which does noteven have representatives of the Armed Forces as their Members, will never be able to achieve a deep understanding or be sensitive enough to their problems.  It is for this reason of lack of sensitivity, that the status of the Indian Armed Forces has undergone constant erosion with every Pay Commission Report.  

(b)     Problems are of Basic Principles and Not Mere Technicalities.  The Anomalies Committees can address the technicalities but our problems are on account of the core concepts and approach and not merely of technicalities.  The problems of the Services can be solved, only with the involvement of
the leadership of the Country.  Therefore, a "Group of Ministers" alone will be able to address these issues.

Summary of Recommendations

5.      (a)     Lateral Shift and Assured Second Careers for Men (Para 3(d)).   Since all the recommendations for the men are based on an assured second career, which is likely to be a non starter, a time limit of one year be fixed for implementation of the proposal of 'lateral shift'.  In the interim, all related recommendations for men be reviewed and made applicable as suggested in this paper based on the existing scenario.

(b)     Military Service Pay (MSP) (Para 3(a).  As recommended by the three services to the Ministry of
Defence, this compensation be fixed in the following manner; (i) for the jawans and Junior Commissioned Officers, MSP should be 62.5 percent of their basic pay  (ii) for officers at all levels, it should be fixed
at 56.5 percent of their basic pay (iii) since, there is no justification for excluding Maj Generals and Lt Generals from this pay (just 300 in number), they should also be included for benefits as all other officers.  (iv)  Lastly, as these difficult service conditions have been existing all along, the arrears must be paid wef 01 Jan 2006,as in case of other recommendations of the Pay Commission.

(c)    Depressed Pay Scales and Restoration of Status of Officers (Para 3 (b).  In order to restore parity, the recommendations are; (i) ideally,the rank pay should be restored or alternatively the grade pay be
linked to the length of service equivalent to that of the IAS, since the promotions in the services are much slower and fewer. (ii) with a view to protect the status equations of Lt Gens, they should be above
DsG of Police forces and be equivalent to that of the five DsG of the PMFs and remain in Article 24 of the Warrant of Precedence and lastly (iii) the status equations finalized in the Fifth Pay Commission report
must be maintained in all the ranks.

(d)     Introduction of Running Pay Band and Adverse Impact on Junior and Middle Piece Officers (Para 3 (c).  To offset the disadvantages of virtually no benefits to junior and middle level officers and also the factor of much delayed-cum-fewer promotions, an additional pay band be introduced.  There should, thus, be two pay bands; one for Lt to Lt Cols and second for Colonels to Brigadiers with suitable raise linked
to the length of service.

(e)      Protection of Pension for Past Retirees (Para 3(e)).  Fixation of pension scale for the past
retirees be done in a manner that their interests are protected and they get raise in their pensions to the tune of minimum 30 percent.

 (f)    Group of Ministers (GOM) (Para 4(b)).   It is recommended that a GOM be appointed to examine the grievances of the Services.  Till the time, their recommendations are finalized, the Pay Commission Report for the Services be held up.

Conclusion

6.     Sir, you yourself hail from a State which has traditionally produced soldiers.  You would have often wondered, as to why a supremely fit Jawan/JCO who retires at the young age of 42-48, ages and grows old so fast.  It is because he has no resources to fall back upon to ensure a decent living for his family after his early retirement.  This  problem gets further accentuated with the constraints of even poor farming conditions.   Why should a soldier retire at this early age (other services serve upto 60 years) and why this man who has served the Nation so valiantly not be given a second career by way of "lateral
transfer", which alas will never come about.

7.       The service conditions have become even tougher and more risk prone today than what they were when we joined the service in 1962, because of the pressures of "Insurgency".  Insurgency poses nearly as much physical danger as a war.  A soldier is thus exposed to constant risks and yet he retains the motivation to build a "Fence of 650 km length at varying altitudes upto 14000 ft" in six to nine months flat, to successfully defeat the infiltration.  The Foreign Armies are studying the underlying reasons of such a high level of motivation and dedication. In the Indian Armed Forces, a jawan/officer serves almost every alternate tenure of three years in the insurgency environment, whereas all other Armies in the World are not being able to sustain even one 'nine months' tenure.  The officers and their jawans do it for the Izzat (honour) but this raison d'etre is now getting deflated with such Pay Commission Reports, and all their expectations are being shattered.

8.       I strongly urge you Sir, to appoint a "GOM" for the Armed Forces and withhold the implementation of this report, for the Defence Services, till the justice is given to them.  The Armed Forces cannot sustain any continuation of poor intake of officers and also current wave of  resignation requests. Already, the Indian Military Academy and OTA, Chennai are reporting a drop in the intake by over 70 percent. In the case of the jawans, this recruitment trend willcontinue yet for a few more years, but their level of motivation will drop.  The Country cannot afford either of these situations.  

 
                                                                       
                                                                       
                                                                                                                       Sd/-x-x-x-x-xx-

Dr. Manmohan Singh

Hon'ble Prime Minister

Government today said it would tax only 40
per cent of salary arrears to be paid to central government employees
in the current fiscal on implementation of Sixth Pay Commission
recommendations.Generally speaking income earned in a year is taxed in that particular year, official sources said.



A section of the media today reported that the entire amount of arrears would attract tax this fiscal.As per the notification issued by the government last month,
central government employees will get 40 per cent of arrears during the
current financial year and the remaining amount in the next financial
year.


Government instructions issued on August 30, 2008, regarding
fixation of pay and payment arrears consequent to implementation of the
Sixth Central Pay Commission recommendations clearly states that in
authorising the arrears income tax as due may also be deducted and
credited to the government.The arrears with effect from January 2006 would cost Rs 29,373
crore. Of the arrears, 40 per cent would be paid during the current
year to the 50 lakh employees of the central government.


The revised pay scales will add Rs 4,500-5,500 crore to the
government exchequer this fiscal in the form of personal income tax.Besides, some money would also come through indirect taxes as some
of the increased pay would go into buying products and services,
official sources said here

A day after the government notified the revised pay scale for armed forces officers, their top brass are understood to have conveyed their unwillingness to implement the Sixth Pay Commission report until
anomalies are removed and the status of downdgraded ranks is restored.

Problem Area

For the past two days, faced with resentment by middle and senior level officers, top officials from the three services have been closeted with Defence Ministry officials to explain the downgrading of the status of colonels and brigadiers. However, they appreciate the new pay scales for personnel below officer rank (PBOR) as well as aspects such as full pension on completion of 20 years of service for officers and 15 years for PBORs. Their unwillingness to implement the pay panel’s recommendations revolves round the case of Colonels and Brigadiers and their equivalent in the navy and the air force.

Sources said the Fifth Pay Commission recommended pay received by aLieutenant Colonel on the bottom of the scale as on January 1, 2006 wasabout Rs. 28,000 compared to Rs. 26,500 for a civil Non-FunctionalSelection Grade (NFSG) officer. But according to the Sixth Pay Commission, a Lt. Col. would receive Rs. 31,500 as against Rs. 45,000 for an NFSG officer at the bottom of the scale. The NFSG officers whowere drawing a pay lesser than Lt. Colonels are now in Pay Band 4,while Lt. Colonels remain in Pay Band 3. The NFSG officers on the civilside include superintending engineers of the Central EngineeringServices, the Directors of the government of India, Commandants in Central police organisations, Additional Commissioners of Income Tax and scientists ‘E’ of the Central Scientific Departments.

The sources said Defence Minister A.K. Antony gave the assurance that he would take up the anomalies with the government and attempt to get them removed.It was on his initiative that the government had set up a high level Pay Commission review panel to look into the grievances of the armed forces.While some benefits did accrue to the officers and PBORs, the notification left colonels and brigadiers and their equivalents, considered the backbone of the armed forces’ officer cadre, dissatisfied.

The Hindu News Update Service

The Armed Forces have communicated to Defence Minister A K Antony that they were "unwilling to implement" the Sixth Central Pay Commission (CPC) report without "anomalies" being removed to restore their status and parity of pay scales.

"A high level delegation from the Chiefs of Staff Committee (COSC) made a presentation to Defence Minister A K Antony and top officials on anomalies, as introduced in the notified CPC report for officers, though it expressed satisfaction over the pay hikes for personnel below officer rank," Defence Ministry's top sources said here on Tuesday.

After witnessing the presentation, Antony was quoted as assuring the Armed Forces that he would take up "the anomalies" with the government and get them addressed, sources said.

The presentation comes in the wake of Chairman of COSC and Navy chief Admiral Sureesh Mehta meeting Antony on Friday evening just hours before the CPC report was notified seeking to stop the government order as "the anomalies" were not removed.

When Mehta was on a visit to Japan and South Korea early last week, then acting Chairman of COSC and IAF chief Air Chief Marshal Fali Homi Major had written to Antony pointing out that the extant parities of Lieutenant Colonels and their equivalents in the Navy and Air Force were lowered by retaining them in Pay Band-3, while raising similarly placed civilian and paramilitary officers to Pay Band-4.

Following the notification of Sixth Central Pay Commission (CPC) for Central Civil Employees, the government of India on Monday issued the improved 6th Pay Panel recommendation for the officers of armed forces in a move to implement it on September 01, 2008. But the army officers are not pleased with this notificati and top level officials of all the three wings are reportedly considering to meet Defence Minister A K Antony to again review the 6th CPC report.

The Ministry of Defence has accepted the recommendations of Sixth CPC and for implementing it on time, it has issued the notice on Monday. The move of issuing notification refers the move of salary fixation that would be implemented from this month and would come into effect from January 01, 2006.

The Defence Ministry has accepted the modified format of new pay revision that would be 1.86 times more on basic salary while Sixth CPC has recommended it to implement with the multiplication of 1.74. The Defence Ministry has also accepted to distribute arrears in cash in two parts: 40% in this fiscal while 60% in the next fiscal. The recommendation of hiking annual increment from existing 2.5% to 3% has also been accepted while the rates of Special Forces Allowance for Army and Air Force has been equated with Navy's Marine Commando Allowance.

The government has also rejected the same recommendation that it had done in Central employee pay recommendation including flexi hours for women and disable persons, restricting to only three government holidays and Liberal 'severance package' for those employees who want to leave service without pension with more than 15 years but less than 20 years service.

But, the armed officials are not happy with all and want further rectification in the modified salary structure. They are arguing that Sixth CPC recommendations have enhanced the inequality between the salary structure of civil officials and the defence officials especially the mid-level officials whose ranking is considered equivalent to any Indian Administrative Service (IAS) officials.

As per defence officials, Majors and Lieutenant Colonels who were at equivalent salary scale of Rs.15,100 in the fifth CPC recommendation would now get Rs.11,000 less from the IAS officers. Moreover, the Lt General second highest ranked army officers who command over 40,000 troops will get less salary than the Director Generals of Printing, Stationary and many more who have no operational role.

The mid-level of army officials like Majors, Lieutenant Colonels that are nearby 25,000 in all wings of defence are considered as cutting edge of forces.

According to sources, Army Chief General Deepak Kapoor, Naval Chief Admiral Sureesh Mehta and Air Chief Marshal F H Major are considering to meet the defence minister to revive it once again before imposing this ‘disparity’ pay scale.

The Ministry of Defence, on the basis of the Sixth Central Pay
Commission, has approved new pay scales and other allowances for
officers as well as for the Personnel Below Officer Rank (PBOR) of the
Armed forces.

The Government on October 2006 set up the Sixth Central Pay
Commission (CPC) and the Commission submitted its report on March 24
this year.

The report covered among other things, matters relating to structure
of emoluments, allowances and conditions of service of Armed forces
personnel

Following are some key points after notification.

Govt. has accepted most of the points but has rejected three recommendations and has put some other contentiousissues to be taken up in future.But it has done a commendable job by not just accepting most of the pay panel recommendations but also improving upon the recommendations in many cases.


Pay Band and Grade pay:

• Grade Pay up to PB2 recommended by 6CPC accepted as such.

• Revised Grade pay from PB3 and above. Check New pay band and Grade Pay The basic pay drawn as on 1.1.2006 on the existing Fifth CPC pay scales will be multiplied by a factor of 1.86 and then rounded off to next multiple of 10. This will be the pay in the revised running Pay Band. Grade Pay, as approved by the Government, corresponding to the pre-revised pay scale, will then be added to the Pay in the revised Pay Band. The total of pay in the Pay Band and grade pay will be the revised Basic Pay as on 1.1.2006.

• Rate of annual increments will be 3% and the rate of variable increment for high achievers in PB-3 will be 4%.

• There will be a uniform date of annual increment, viz. 1st July of every year. Employees completing 6 months and above in the revised pay structure as on 1st of July will be eligible to be granted the increment. The first increment after fixation of pay on 1.1.2006 in the revised pay structure will be granted on 1.7.2006 for those employees for whom the date of next increment was between 1st July, 2006 to 1st Jan 2007.

DA and other Allowances

• AICPI (IW) with base 2001 may, henceforth, be used for the purpose of calculating DA till it gets revised. The base using the 2001 series works out to be 115.76. Based on this index the revised DA as on Jan-06, July-06, Jan-07, July-07, Jan-08 and July-08 are estimated to be 0%, 3%, 6%, 9%, 12%, and 16% respectively (based on the calculation made as per index - Exact DA rates are yet to be confirmed by the Govt).

• Campus restriction for grant of Transport Allowance will be removed. Consequently, employees living in campuses will also be eligible for Transport Allowance. Further, Transport Allowance for the employees at the lowest levels will be increased to Rs.600 (from Rs.400) in A-1/A class cities and Rs.400 (from Rs.300) in other towns.

• New TA - Employees drawing grade pay of Rs. 5400 and above will be eligible to receive TA of Rs.3200 and DA thereon (A1/A class cites) and Rs.1600 and DA thereon (other places. Similarly Employees drawing grade pay of Rs.4200 to Rs.4800 will be eligible to receive TA of Rs. Rs.1600 and DA thereon (A1/A class cites) and Rs.800 and DA thereon (other places). Employees drawing grade pay of below Rs. 4200 will be eligible to receive TA of Rs. 600 and DA thereon (A1/A class cites) and Rs.400 and DA thereon (other places).

• City Compensatory Allowance abolished.

• Employess living in X (Earlier classified as A-1), Y (Earlier classified as A, B-1 & B-2), and Z (Earlier classified as C and Unclassified) will be eligible for HRA of 30%, 20% and 10% (on Fixed Pay and Grade Pay) respectively.

• Children Education Allowance and Reimbursement of Tuition Fee are merged and reimbursement of Children Education allowance will be paid upto the maximum of Rs.1000 per child per month subject to a maximum of 2 children.Hostel subsidy will be reimbursed upto the maximum limit of Rs.3000 per month per child. The limits would beautomatically raised by 25% every time the Dearness Allowance on the revised pay bands goes up by 50%.

• Cycle Allowance, Washing Allowance, Cash Handling Allowance, Special Allowance, Night Duty Allowance and Split Duty Allowance have been doubled. Similarly, rates of allowances specific to different Ministries/Departments/Organisations not covered in this Report will also be doubled. The rates of these allowances will be increased by 25% every time the Dearness Allowance payable on revised pay scales goes up by 50%.

• All provisions concerning travel under LTC are to be retained except frequency of travel in home town concession (up to three times during the first two blocks of 4 years after joining the service).

• The revised allowances, other than dearness allowance, will be effective from 1st day of September, 2008.

ACP (Assured Career Progression):

• Three upgradations will be granted under Assured Career Progression (ACP) Scheme at 10, 20 and 30 years as per the modified ACP Scheme recommended by the Commission. ACP Scheme will also be applicable to Group A employees.
  

• Financial upgradation through ACP will be available whenever a person has spent 10 years continuously in the same grade.
  

• Benefit of pay fixation available at the time of normal promotion shall be allowed at the time of financial upgradations under the scheme. Thus, an increase of 3% of pay and grade pay shall be available as financial upgradation under the scheme.

Other Points accepted by the Govt:

• The Commission's recommendation regarding payment of arrears has been modified to the extent that the arrears will be paid in cash in two instalments – first instalment of 40% during the current financial year (2008-09) and the remaining 60% in the next financial year (2009-10).

• The Government has approved setting up of Anomalies Committees to examine individual, post-specific and cadre specific anomalies. The Anomalies Committees should endeavour to complete their work in one year.

Recommendations not accepted by the Govt:

• 
  Liberal severance package for those employees who want to leave service without pension with more than 15, but less than 20 years of service.
• Recommendation relating to Holiday Policy that there should only be three closed holidays for Government employees.
• Flexi-hours for women employees and flexi-weeks for employees with disabilities.
  

Recommendations of Sixth CPC which will be examined separately :

• Recommendation related to Bonus and Over Time Allowance.
• Recommendation related to General Provident Fund for Central Government employees and Central Government Employees Group Insurance Scheme.
• Introduction of Health Insurance Scheme for Central Government employees and pensioners.

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Source : Khabrein

It is a good news for former defence personnel. The Union government is planning to launch an Ex-Servicemen Commission on the lines of sixth Pay Commission. The announcement was made by the Indian Defence Minister AK Antony.Several senior officials in armed forces who had been complaining that they had been given a raw deal by sixth pay commission can now have a sigh of relief. The minister said that the government has earmarked a huge amount to take care of the grouses of the sixth pay panel.

An army official while writing to Khabrein.info complains the unfair treatment to armed forces personnel. He says, “The pay commissions have always been singularly unfriendly to the men in uniform may be because our call of duty does not permit us to protest. I am a group captian with 32 years plus service and yet to be considered for my promotion because of limitations of pyramidical structure. My salary at this time is Basic pay 17350+ Rank Pay 2000+ Stagnation pay 900. Total 20250. Initially I was placed in PB 3 where I would have achieved highest of Rs 39100 within an year or so. Stagnation pays are so common to Armed Forces officers because the salary band are so narrow (suiting only IAS offices who get promoted before acquiring highest of the pay band. Not
many of my civilian colleagues will believe that I reached my highest possible pay more than three years back and has to wait there till promotion board (if it ever does) comes up”.

He goes on to say, “There is a genuine need to have extended scales for armed forces. And please do not forget that I hope to retire at 56 and look desperately for second career to meet my nfinished commitments”.This official is not the only one complaining about the unfairness of the Sixth Pay Panel towards armed forces. Even Indian Air Force chief was forced to write about it due to anomalies in pay structure.

Over 50 lakh government employees, including the armed forces personnel, will be receiving an enhanced pay packet beginning September 1, with the government on Friday notifying the revised recommendations of the Sixth Central Pay commission(CPC). The much-awaited CPC had received a seal of approval from the union cabinet a fortnight ago after it amended certain recommendations of the Justice Sri Krishna-led Pay Commission that submitted its report to the government on March 24 this year.

Earlier, the government said it will pay its 50 lakh strong workforce an additional Rs 11,000 crore over the pay hike of Rs 30,000 crore, including arrears recommended by the Sixth Pay Commission in March. The modification of the Pay Commission award will cost the exchequer an additional Rs 5,000 crore towards annual wages and Rs 6,000 crore towards arrears, said Expenditure Secretary Sushma Nath.

The original recommendations of the Sixth Pay Commission would have entailed an additional expenditure of Rs 12,000 crore in annual wage bill and Rs 18,000 crore towards arrears. However, prompted bythe protest from several quarters, including representations from the defence forces, the government appointed a high-powered committee under the chairmanship
of Cabinet Secretary K M Chandrasekhar to suggest improvement in the Pay Commission award.

Source:Khabrein.info

Here we detail some major changes / addition on Sixth Pay Commission.

Sixth Pay Commission has done a meticulous job of rationalisingrelativities
of salaries with special reference to the training andskills required.
The general structure of pay scales recommendednaturally builds on the
existing scales but tries to correct nomalieswhere they exist. A Pay
Commission cannot be expected to consider or recommend a complete
reorganisation of administrative structure.A review on the major
changes / addition on CPC report by the CoS

• Enhanced the revised pay bands recommended by the pay commission tobe based on multiplication factor of 1.74 to 1.86 The fitment had to be(Basic + DP)*24%.

• The Armed Forces Personnel below Officers Rank will get a MilitaryService Pay (MSP) of Rs 2,000 per month, Rs 1,000 more than that recommended by the Commission. The Officers of the Defence Forces would get an MSP Rs 6000 over and above their salary. The forces haddedicated and sincere minister to bargain for them.

• Increase in the rate of annual increment for 2.5% to 3%. Removed
  the performance based increment. After all performance has got a
  different meaning at government.
  

• The middle level officers of the Defence Forces, namely Colonels and
  Brigadiers, have been placed in the highest pay band of PB-4.Middle
  level police and civilian officers — DIGs, Conservator ofForests, Scientists E and F, Superintending Engineers, Directors,Additional Commissioners of Income Tax and Central Excise and posts inequivalent grades — have also been placed in the highest pay brand. The higher level officers benefit from the increased grade pay.
  

• Increase in Transport Allowance at the lowest level to Rs 600 (from Rs 400 in
  A-1/A class cities recommended by the Sixth CPC) and Rs 400 (from Rs 300 in other cities recommended by the sixth CPC). Removal of Campus restriction for grant of Transport Allowance. Minor benefit for the lowest level
  

• At least three promotions have been assured for all Defence Forces personnel and civilian employees under the modified Assured Career Progression (ACP) Scheme. While the civilians would get it after 10, 20 and 30 years of service, the Defence Forces Jawans would get ACP in 8, 16 and 24 years.

Source: Defence India

Omission & Commission

Unfortunately the Sixth Pay Commission has not been able to address to the perennial problems of the services-inspite of giving some financial benefits which appear bloated on careful analysis. This has happened due to the absence of any member from the services which constitute 40% of the central government employees. Perhaps such a dispensation had been intentional to deny to the services their due as always?

Comparing the Comparables

Comparisons are odious & should not be made unless there is common denominator. Therefore equating service officers with others having civil interface is based on wrong premises as evident from long que for premature retirement only amongst defence officers & total absence on the other side. While most of the service personnel have to work post retirement to keep the wolf away-there is seldom even naib- tahsildars that any such have such need. Has this reality of modern India engaged the attention of the Pay Commission? This Why so has to considered as Factor Y into any new pay dispensation.

Should the salary of a pilot flying ancient single engine MiG -21 from desert airfields in the hot afternoons have some semblance with that of a commercial pilot cruising latest multi -engine Airbus with co-pilot, state of the art autopilot & latest navigational aids? Similarly the pay of captain of an old aircraft carrier with unfaithful Harriers now not onboard must have some correspondence with the Captain of maritime ship who earn upward of a few lacs a month. And what should be the salary of an Air Commodore commanding n airbase base with one fighter squadrons & two transport squadrons doing day & night flying –carrying out air supply missions to far flung border outposts on the roof of Himalaya- besides supporting civil air traffic-in addition to defending the air space over an entire region? By that count where should the Corps Commander of J&K fit in? There is no use equating a brigadier with a DIG or the Chief of Air Staff to the Cabinet Secretary. Comparing a fighter pilot with commercial pilot, an engineer in the armed forces with another manger in say L&T would seem more logical than equating a Lt Gen with a Secretary to the GOI?

Century for Pensioners

Defence pensioners have been left high & dry once again. One rank one pension or restoration of full pension after 12 years has been thrown out. Increasing pension at 80, 90 & 100 years is symbolism at its best or double century which never was. The number of centurion pensioners at best could be in two figures at All India level? What about lowering the age bar by 10 years at every stage -starting at 70 years with full restoration & 20% hike?

With faster promotion these days & upping at least by one rank due to abolition of the 2 Lt rank- the pension of old timers could have been fixed appropriately instead of unnecessary mathematical tabulation. An old timer Lt Col can be given pension applicable to the present day Colonel. Major Dhanapalan anomaly of mass scale deprivation of an entire class of service officers which really fixed them during the fourth CPC has been just carried over.

Interim Measure

Now that every one in defence is unhappy about the recommendations -best should be to ignore it & give reasonable interim relief say @ 50 % of the basic plus dearness pay or 20000/- for officers & 50% of pay & dearness pay or Rs 8,000/- for the soldiers –whichever be higher as on 01 Jan 2006. The interim relief can be half of this amount for pensioners.

Defence Commission

The way there has been chorus against the Sixth CPC & even the service chiefs are unhappy about it-the Govt would do well to constitute a new Commission with adequate members from armed forces –both serving & retired –to focus on the problems faced by the services in holistic manner. We need a person who can be Shri Krishna & guide the nation in how to bring up the sagging morale of the defence forces as manifest from unacceptable number of vacant berths in the services. Marshal of the Air Force Arjan Singh, DFC best fits the bill. May be the Five Star living legend of our times can do justice where Sixth CPC could not go beyond superfluous touches in the passing.

Areas of Concern

The Defence Commission could look into the following problems-

In depth Analysis. Candid study should be made why services has become the last choice of our young men these days. Apart from low pay, unsettled life and remote chances of going beyond Colonel’s rank – the services have lost the glory & pride it used to command once upon a time. The service people must get place in the present day money driven society. Barring few exceptions the wards of service personnel are shunning services. Therefore there must be something drastically wrong which needs to identified & remedied.

Pay & Perks. The pay should get multiplied by Factor X to take into account-Hard service conditions, being on duty 24 hours a day, risk involved, unsettled & separated life, need to have two establishments etc. Then there could be Factor Y multiplier as above. Apart from this there could incentives like Income & Municipal tax breaks. Like agricultural income, the services pay & pension can be taken out of IT net to salute the soldier?

Service Conditions. There is urgent need to improve service conditions like-accommodation, clothing, ration, transportation, number of postings, education facilities & opportunity for the spouse to work in the same station.

Younger Services . Human factors involved in retiring soldiers at an age when they are not young enough to pick up the threads of an entirely a new profession or old enough to idle at home on meager pension be studied & resolved. Soldiers can be given some land under ceiling in cities or along the borders to bolster security besides helping them out? If land could be given to multinationals –it could be as well those who are keeping us united in the face of so much adverse conditions?

Lateral Induction. The scope of lateral entry needs to be enlarged to include professionals like airmen from technical trades who can be issued Basic Aircraft Maintenance Engg License (BAMEL) by the service instead of going through the DGCA loop. It would be quite interesting to note that most of the instructors in Aircraft Maintenance Engineering schools training aspirants for BAMEL- have retired airmen as instructors. Those who have spent an entire lifetime in servicing military aircraft like AN-32, Gajraj, Boeings in VIP Squadron or the Mirage-2000 would require DGCA certificate even to put chocks or refuel an airliner! Similar arrangements also need to be made for the service pilots for issue of Commercial Pilot License by the services. The gaps in civil requirements can be filled up by in-house pre-release training by the services. To keep the services young there could be lateral induction in IAS/IPS also from the defence forces.

University Diplomas. There are lots of other trades in the three services which can be useful in civil sector provided there is recognized certification. The retiring soldiers can be issued proper degree or diploma certificates based on trade tests/ service courses by tie up with Universities of repute.

We owe it to them? Retired soldiers are great human resource asset of our nation & must be dovetailed into the economy for growth. They can also be brand ambassadors of the services more than futile ad campaigns –only if they are not forgotten as these days. The Sainik Boards can be put under dynamic senior retired generals- who can really look after the welfare of retired people. There could be surplus land allotment to the retiring soldiers & the state governments too can do their bit by earmarking plot for the serving & retired defence persons. It was long ago in the Sixties when S Partap Singh Kairon – showed such empathy for the service personnel.

Paradise Lost. Problems we all have been loath to discuss like restoration of lost glory & protocol apart from attractive pay package to attract bright young men to the profession of soldiering once again needs to be addressed by the proposed defence commission. The bottom line is that the armed forces are short of 25% officers & cradles of leadership both at National Defence Academy & Indian Military Academy are half empty.

Safeguarding Freedom

If we have to safeguard our independence- gained just six decades back after centuries of subjugation-even under slave dynasty, there in need to make services once again preferred career destination for intelligent young men of courage & conviction who can fire straight from the gun. The recent defence budget of merely 1.98 % of the GDP has already put us in the danger zone. In the present uncertain geo-political situations, unrest in Tibet & Chinese postures in Arunachal Pradesh, hostile neighbor hood, possible disruptions by various terror groups, naxalism & immature divides amongst people- the armed forces remain the only hope to keep us united. This hope must be kept alive at all costs.

Setting Example
Once upon a time, even the scions of royalty used to deem it a great honor to serve in the armed forces. To understand what it means to defend the nation our leaders must make it a matter of pride to have at least one of their sons or daughters in the armed forces to serve the nation instead of straightway making them members of the legislatures. They can take heart from Prince Harry of Britain who came back safe from the military stint in Afghanistan-undoubtedly one of the most dangerous place on earth

The government must take immediate steps to restore the parity in
the pay scales of officers of the rank of Lieutenant Colonels and
equivalent with their civilian and Coast Guard counterparts who have
been awarded more emoluments by the Sixth Pay Commission, says Indian
Air Force (IAF) chief Air Chief Marshal Fali H. Major. Major has made
the plea in a letter to Admiral Sureesh Mehta, Chairman of the Chiefs
of Staff Committee and the Indian Navy chief, urging him to intervene
before the government implements the recommendations made by the pay
commission.

“The finance ministry is introducing yet another anomaly by lowering
the extant of parities of officers of the armed forces, of the Lt. Col.
(and equivalent), by retaining them in pay band-3, while raising
similarly placed civilian and paramilitary officers to pay band-4,”
Major wrote in the letter sent Monday. A copy of the letter was made
available to IANS.

“It is reliably learnt that civilian and paramilitary officers in

the extant pay scales S-24 (Rs.14,300-400-18,300) and S-25
(Rs.15,100-400-18,300) will be placed in pay band-4, whereas the same
is being denied to the armed forces officers (Lt. Col. and equivalent)
who were already in S-25,” Major said.

The IAF chief has pointed that because of this the civilian officers

who were in the lower pay bracket (S-24) and were hitherto drawing
lesser pay than Lieutenant Colonels and officers of equivalent ranks
would now draw a higher basic salary.At present, the India Army, the Indian Navy and IAF have 11,187,3,528 and 4,216 officers, respectively, of the rank of Lieutenant
Colonel and equivalent.

“This is not just affecting a Lt. Col. Because of this the pay of

Coast Guard’s commandant with 23 years of experience will be equivalent
to a Rear Admiral with 30 years of experience,” a senior army official
said.

The cabinet Aug 14 cleared the revised recommendations of the pay
commission, granting huge hikes to five million government employees,
with special attention paid to military and paramilitary personnel.According to the government, the revision translates into a 20 percent hike over the 40 percent across-the-board increase the pay commission had recommended.

The government promised at least three promotions for defencepersonnel and civilian employees under the modified assured careerprogression (ACP) scheme.

Civilians will be assured of promotions after 10, 20 and 30 years of
service. Junior and non-commissioned officers and personnel below
officer rank (PBOR) will be eligible for this after 8, 16 and 24 years
of work.

The Military Service Pay recommended by the pay commission has been doubled to Rs.2,000 for PBORs and retained at Rs.6,000 for officers upto the rank of brigadiers.

Middle level officers - colonels, brigadiers and equivalent - are now placed in the highest pay band of PB-4. Lieutenant generals overlooked for promotion as army commanders due to lack of residual service will get the grade of an army commander.

The report of the Sixth Pay Commission, headed by Justice (retd)B.N. Srikrishna, was submitted to Finance Minister P. Chidambaram March 24.It led to protests from both civilian and defence personnel,following which the government appointed a committee under Cabinet Secretary K. Chandrashekhar to study the various demands for financial corrections.

The three service chiefs also made a joint representation to Defence Minister A.K. Antony.

The Indian Air Force (IAF) chief has criticized the Sixth Pay
Commission and said that there was a need to create parity between
civilian and military pay scale.

The criticism comes after several senior armed forces officials had
welcomed the final Sixth pay Commission recommendations as accepted by
the Union Cabinet on 14th August. Government had made several
amendments to the original recommendations of the sixth pay commission
to satisfy the demands of the armed forces.



Former armed forces chief General (Rtd) NC Vij had criticized the
original Sixth pay recommendations calling it inadequate. In a letter
written to Prime Minister Dr Manmohan Sigh he had said, “ As a former
chief, I feel morally duty-bound to bring this fact to the notice of
the Hon'ble Prime Minister in my personal capacity. I take heart from
the fact, that it is under your leadership, that, in my tenure, the
government went for a major improvement in the 'operational posture by
sanctioning South Western Command and 9 Corps HQs with full complements
and also for some restoration of self esteem of the young officers
through addressing their delayed promotions-cum-service conditions, by
approving Part 1 of Ajay Vikram Singh Committee report'…If this had
been followed up, through a balanced PCR and implementation of Part II
of the 'AVS Report', things would have reasonably improved, but
unfortunately the very opposite has happened.”



Stressing on the plight of army personnel he further said, “Sir, you
yourself hail from a state, which has traditionally produced soldiers.
You would have often wondered, as to why a supremely fit jawan/JCO who
retires at the young age of 42-48, ages and grows old so fast. It is
because he has no resources to fall back upon to ensure a decent living
for his family after his early retirement. This problem gets further
accentuated with the constraints of even poor farming conditions. Why
should a soldier retire at this early age (other services serve upto 60
years) and why this man who has served the Nation so valiantly not be
given a second career by way of 'lateral transfer', which alas will
never come about”.

Source: Khabrein.info

Contrary to widespread misperception that 6th Pay Commission will
have adverse impact on India’s economy, a report says that it wouldn’t
have any negative impact. The report comes at a time when many
economists and analysts both with India and abroad had said that it
will be increase deficit and may aggravate inflation.

Central government that is all set to issue notification for the
implementation of the pay panel recommendations must have heaved a sigh
of relief over the finding of Fitch Ratings India.

The Fitch Ratings India’s finding totally negates the economists who
had been ranting that it will be counter productive for the nation and
that it will be very difficult for the country to absorb the financial
impact of the increased pending on the pay panel implementation.

Around 5.5 million central government employees are going to benefit
from the pay panel recommendations. A larger number of state government
employees too will benefit from the recommendations if their respective
state governments implement the recommendations.

It is estimated that the wage hike would increase the financial
implication for the Centre by Rs 17,798 crore annually and the arrears
with effect from January 2006 would cost Rs 29,373 crore, Information
and Broadcasting Minister P R Dasmunsi told reporters after the Cabinet
meeting. The financial implication of Pay Commission on the General
Budget would be Rs 15,717 crore and Rs 6414 crore on Railway Budget in
2008-09. The government’s present salary bill is over Rs 70,000 crore
and the pension bill is over Rs 30,000 crore.

Dr Devendra K. Pant of Fitch Ratings India says, “In 1997, the fiscal
situation was grimmer for Indian states when increased expenditure on
wages and salaries resulted in increased borrowing, engulfing some
states in a fiscal crisis and trapping them in a vicious cycle of debt”.

Source:Times of India

The Gujarat government has decided to set up a babus' committee on implications of the Centre's sixth pay commission award to hike employees' salary by 20 per cent for the state.

Talking to newspersons soon after the weekly Cabinet meeting, government spokesperson Jay Narayan Vyas said, "The secretaries' committee will submit its report to the Cabinet sub-committee , formed early this year on what the sixth pay commission may mean to Gujarat."

The announcement was based on a suggestion to the Cabinet on Wednesday that officials must first examine the sixth pay panel suggestions before putting them into effect. Vyas said, "The official committee will submit its report to the sub-committee , which in turn will get Cabinet nod before putting the sixth pay panel recommendations into gear." The minister gave no time frame, nor did he name the bureaucrat who will head the official committee. Vyas complained, the Gujarat government has still not received "full details" of the sixth pay commission, including what it means to all-India employees.

Last year, when the pay commission was still busy preparing its report , Chief Minister Narendra Modi had demanded from the Centre financial help to ward off the burden on the state exchequer.

He did this even while declaring that the state's financial situation was the best in many years, with fiscal deficit within reasonable limits . Officials apprehend that fiscal deficit, which stood at 2.16 per cent of the gross state domestic product (GSDP) last year, might rise in case the sixth pay panel is implemented.

With a whopping burden of Rs 2,000 crore per annum, most of the gain from the rise in value-added tax (VAT) and other state taxes' incomes, which comes to Rs 3,100 crore per annum . "We will not be able to pass on the gain for developmental needs in the Centre doesn't help," an official said. In all, 4.87 lakh government employees and 3.13 lakh pensioners are waiting to gain a rise of 20 per cent from the sixth pay panel.

Of these, 3.92 lakh are employees working in government departments in different parts of Gujarat, including teachers in government schools. Then, there are nearly 88,000 employees working in aided institutes and another 6,000 employees in state public sector undertakings.

The Sixth Pay Commission has been targeted, unfairly, in my view, for not accomplishing objectives, such as reduction of corruption and improvement of administrative structure, which were not within the terms of reference of the Commission.

In public discussions, various participants, especially in the visual media, have concentrated their ire on the fact that the Pay Commission has increased salaries for the bulk of government servants without insisting on marked productivity improvement. There has also been criticism that higher pay alone will not necessarily reduce corruption. Some of these are obvious facts.

The Pay Commission has done its job of recommending a suitable structure of salaries for different categories of government servants, including those in the Armed Forces. Opinions may differ as to whether the recommendations are satisfactory with reference to the expectations of different categories.
Meeting expectations

But the fact remains that the Commission has done a meticulous job of rationalising relativities of salaries with special reference to the training and skills required. The general structure of pay scales recommended naturally builds on the existing scales but tries to correct anomalies where they exist. A Pay Commission cannot be expected to consider or recommend a complete reorganisation of administrative structure.

Criticisms voiced range from a total condemnation of non-response of the government servants to grudging acknowledgment of the fact that there are dedicated government servants who perform brilliantly in the given situation. Whether the structure of salaries recommended will attract the right type of people to join the civil services is, of course, a question to be decided in the field of competition.

If the private sector, especially in the new areas of IT, business process and consultancy, can afford to pay higher salaries to attract youngsters into their domain, there is very little that a Pay Commission can do, except to try to meet the expectations of professionals within the confines of the Government’s capacity to pay.

While the private sector, especially in the modern areas of IT-related services, employs a relatively smaller number of people, the Government has to engage a large number of employees to discharge its responsibilities. The criteria for consideration necessarily differ in the two spheres.

I have examined earlier, in these columns, whether the Government is employing too many people and spending too much on its essential services (In an article dated March 10, 2008). The latest Budget clearly shows that, rupee for rupee, government employees in, say, the Revenue Department, Postal Services and Railways give a respectable output and it is not clear whether the allegation of inefficiency can be sustained in those cases.
Performance appraisal, incentives

The argument is advanced that most government servants at lower levels do not perform their jobs and are paid too much for literally no work. The corrective for such complaints is obviously better supervision and oversight by civil society. Local NGOs should bring to light the lack of response by government servants at various levels to repeated complaints of lack of performance.

A system of ombudsman may perhaps be a useful device to correct the impression of sloth among government servants. But that is a matter for administrative reforms, not a Pay Commission.

The Pay Commission has recommended a performance-related incentive structure. But it is obvious that measurement of performance in public services is a difficult job. The quality of service rendered by government servants cannot be easily measured as in manufacturing organisations or profit-making enterprises.

The measurement of satisfaction in the public domain is a difficult task. So, the question of relating payment to performance necessarily falls back on individual appraisal of performance by supervisors of subordinates. This is liable to be subjective.

Having worked in international organisations as well as the private sector, I can make bold to say that they also have not been able to surmount this problem of assessment. Appraisal systems continue to be dominated by managers’ reviews of their subordinates. No objective measure of performance exists in many organisations, except where production or profit targets are specified. The Pay Commission cannot be faulted for failure to overcome this hurdle.

The question whether the Pay Commission has failed to provide adequate incentives to attract suitable candidates to join the Armed Forces is a difficult one to answer. Reportedly, the Armed Forces today suffer from lack of candidates for the Officer class.
On Armed Forces

There seems to be merit in the considerations the Armed Forces have put forward regarding the poor career prospects of even competent officers in the Armed Forces. These require to be addressed if the Armed Forces are to remain a source of strength and not a weakness for India.

There may well be a case for examining the remuneration or promotion structure of the Armed Forces independent of the general services. There may be a case for a separate Pay Commission for Armed Forces, whose conditions of work are far different from those of civilians.

The question whether the Pay Commission has been too liberal has been answered by the very fact that there have been a number of protests against these recommendations as not attractive enough. The total cost of implementation of the recommendations has been assessed at roughly Rs 12,561 crore for the year 2008-09.

Taking account of various measures suggested by it, the net financial implications of the recommendations are estimated at roughly Rs 7,975 crore for the year 2008-09. This is exclusive of the arrears, which cause a one-time burden of Rs 18,060 crore.

Considered against the background of a Budget that involves a salary expenditure of roughly Rs 30,000 crore, this cannot be considered to be too generous. This is, of course, excluding the effects on pensions and on State Governments.
Unfair charges

To sum up, the criticism of the Pay Commission as not having achieved a significant reduction in the prevalence of corruption is ill-conceived. Nor is it fair to say that the Commission has not addressed the issue of administrative reforms.

These are legitimately in the bailiwick of the Administrative Reforms Commission. Ultimately, the civil servants do the job their political masters command them to do.

Within the structure of the Constitution, it is not possible to expect a Pay Commission to do more than rectify anomalies and ensure adequate pay and allowances to attract persons with the skill and training necessary for the civil service.

It is not possible to ensure a corruption-free administration even by giving gold-plated salaries to government servants. If that were feasible, the Enron episode would not have happened. Cupidity is possible even in the most prestigious and highly paid jobs. Resisting temptation is a question of values and the fear of punishment if and when discovered.

The Government of Singapore provides an example of paying its civil servants well and punishing any deviation from virtue severely and in a deterrent fashion. This is a matter of administrative reforms and does not fall within the ambit of the Pay Commission.

The armed forces, which had initially expressed discontentment over quantum of salary hike proposed by the Sixth Pay Commission, today reacted positively to the Centre's announcement adopting the panel's recommendations.

"All the concerns of the defence forces appear to have been suitably addressed by the government's announcement regarding Sixth Pay Commission," Mehta said reacting to Government's announcement.     

The Government today announced an average increase of 21 per cent in salaries of over 50 lakh Government employees with effect from January 1, 2006, adopting the Sixth Pay Commission recommendations.     

In the defence sector, the Government approved at least three assured promotions for all defence forces personnel and civilian employees under the modified Assured Career Progression scheme.     

The Government for the first time approved Military Service Pay for armed forces personnel, under which officers would get Rs 6,000 over and above their pay per month.     

The lowest limit of disability pension for defence personnel would be doubled to Rs 3100 a month. 

Arguing that the Armed Forces deserve a better deal, the Army, Navy and Air Force Chiefs had sought modifications in the Pay Commission proposals including that the military service pay (MSP) be levelled at 25 per cent of the basic pay for soldiers, personnel below officer rank and middle rung officers.