Exactly one month back, the 7th Pay Commission awarded an unwarranted exorbitant raise to all the central government employees. In two years, the state and Municipal salaries will also follow suit.

    The additional annual impact is Rs. 1.02 lakh crores. In two years, annually an additional Rs. 5 lakh crores will make their way into public servant's bank accounts. Compared to this, our annual highways budget is Rs. 43,000 crores and education budget is Rs. 31,000 crores. These additional funds will be squeezed from us by raising Rs. 4,500 per Indian. This money can be used for building India instead.

In 10 years, the government salaries have tripled since 2005. The present raise will quadruple them. India's development has suffered due to lack of funds due to increasing percentage of government revenue going to salaries. Maharashtra state salaries have tripled and so has the debt! In August Maharashtra CM Fadnavis said "at this rate government will have to borrow money to pay salaries."

    There is no justification for the raise. An IIM Ahmedabad report sanctioned by the commission states that the salaries of the lower rung (88% of all employees) are twice those of private. An entry level peon, guard (requiring Xth pass) earns Rs. 24,169 per month. Pay commission wants to raise this to Rs. 30,000 per month.

    I have already written an open letter to PM (reproduced below). All the data is available at cpcscrutiny.com. Please write to the PM to reject the report.

 

 

Open letter to Prime Minister : Save India

Reject 7th Pay Commission report

Prime Minister of India                                                             18th December 2015

Respected Modiji

Sir, 18 months ago, India elected you with a thumping majority because people were hoping for a change for the better. They still look at you with hope in their heart. Don’t break their heart.

Sir, you have risen from a humble beginning. You know how middle and lower classes live. Do you believe that Rs. 24000/= per month is not sufficient for a family of four to live comfortably? Do you agree that Rs. 30000/= per month is a “fair and reasonable” salary for a Xth class pass individual with no skills? This is the Pay Commission recommendation for a government peon.

Fortunately, the incompetent bureaucrats advising the commission have made an amateurish attempt at obfuscation to justify increase in salary when each and every government employee draws more than double the salary for a corresponding post in the industry. There are so many inconsistencies, glaring errors, omissions that you are duty bound to reject the report on technical grounds. The commission’s mis-steps have been listed in the attached document and also have been publicly posted on the website www.cpcscrutiny.com.

The Pay Commission did not have a people’s representative even though they were deciding the fate of public spending. You head the parliament which protects people’s interests. The country is crying for funds for development. Do not permit the Commission recommendations to rob the tax coffers and deposit an additional 1.02 lakh crore rupees in employee’s pockets. This is more than the highway (43000 crore) and education (31000 crore) budget put together. You don’t need the Japanese to fund the Rs. 98000 crore bullet train over several years. We can build full Mumbai-Delhi stretch with our own funds provided you stop administration from cornering the tax revenue.

The states are in a worse plight. Maharashtra CM Fadnavis has openly stated that “at this rate we will have to borrow money to pay salaries”. Maharashtra salary budget (and debt) has tripled and the plan expenditure is a mere 28% of revenue. The Mumbai Municipality now spend Rs. 60000/= per child per year on schooling; up from Rs. 20000/= a few years back. The 6th Pay commission has almost bankrupted the country and the 7th is aiming to finish the job. In my estimate, the impact on state and other budgets would be a mind boggling Rs. 5,00,000 crores annually.

Staring with 1/1/2005, government salaries have already tripled (effect of 6th commission). If you accept the recommendations, you will quadruple the salaries in 11 years at one go.

There is certainly no justification for the raise, but most importantly the commission’s report is full of technical issues. Sir, the 7th CPC has collected nearly 80% of the data required to meet their terms of reference. I request you to reject their report/recommendations and setup a new (independent) commission to gather remaining data and analyse it an unbiased manner.

The report/recommendations have to be rejected because (details attached separately):

Major issues (each sufficient to invalidate recommendations)

• All members of the commission most probably benefit directly or indirectly from the recommendation : clear conflict of interest with terms of reference. Most importantly, there is no independent member to defend the interest of development/social funds/needs.

• The commission has failed completely to meet the following directions:    

             Keeping in view the need for fiscal prudence

·            Keeping in view the need to ensure that adequate resources are available for developmental expenditures and welfare measures

• The commission has, without giving any justification modified the method used by 6th CPC to compute minimum wage figure
• The commission has arbitrarily defined a new addition to 15th ILC minimum wages : skilling. It has not stated what skills are possessed by Xth standard pass peons/guards.
• The commission has, wrongly interpreted the 15th ILC guidelines on minimum wages The correct minimum wage calculation (including the 1991 SC observations) comes to Rs. 13200/= p.m. and not Rs. 18000/= p.m.
• The commission has without any justification increased the allowances by a factor of 58% (in metros) and 49% (in small towns) when allowances are  protected by DA
• The HRA has been doubled even after concluding that the rise in housing component of salary had kept pace with the rise in housing cost for the last 10 years
• The commission has conveniently forgotten that since the salary calculation is based on minimum (sustenance) wages, any increase in allowances should decrease the basic
• The commission has failed to consider that the government salaries have tripled in the last 10 years (6th commission impact) when it was specifically asked to consider history and parity aspects
• The commission has, without any justification held that the increase in lowest level (chaprasi) salary (based on minimum wages – price of atta-dal) should be used to calculate wages of the cabinet secretary (whose family is certainly well fed). I do not know any organization where the increment at the peon level is used to define increments of everyone else.
• The commission has, without any justification, recommended a fitment policy and has failed to quantify (and take into account) the massive 3% increase in PAP expense which will be persistent henceforth (the 6th pay commission’s fitment policy cost Rs. 5 per employee)
• The commission has cursorily considered the ability of states to bear the impact. The government has figures which show salary as a percentage of state plan and state expense. The commission has ignored this data.

Sir, the commission has not met it’s terms of reference. It has glaring errors. Please reject the report and appoint a new commission.

I pray that you will not falter at this crucial stage and accelerate India’s downhill slide. This single action will free at least 5 Lakh crore every year for India’s development. There will be no need to seek funds from other countries to meet our development needs.

Yours Sincerely

Avinash Awate

A concerned Indian

Website : www.cpcscrutiny.com