7th CPC Recommendations on Minimum Pay Calculation – Reports Step by Step
The Commission has estimated the minimum pay (the calculations for
which have been tabulated in the Annexure) through the following steps:
Step 1 : The food, clothing and detergent products listed and
their respective quantities specified by the 15th ILC have been adopted.
These quantities indicate the monthly consumption of the listed
products by a family comprising three consumption units. [For e.g. for
the product ‘Dal’ the quantity specified for daily consumption is 80
grams per consumption unit per day. The monthly consumption of Dal by a
consumption unit thus works out to 2.4 kg (80 x 30). Accordingly the
monthly consumption of Dal by a family comprising 3 units is 7.2 kgs
(2.4 x 3).]
Step 2 : The quantities have been multiplied by their
respective product prices to arrive at product wise cost. The price
adopted for each product is the average of prices of various items that
are included in the product. The price of an item is the average of its
prices prevailing in each month from July, 2014-June, 2015. [At monthly
family consumption of 7.2 kg the Commission has estimated the monthly
expenditure on Dal at ₹704.44 after calculating the price of Dal at
₹97.84 per kg. The price of Dal has been calculated as the average of
prices of Toor, Urad and Moong Dal items specified under the product Dal
and whose prices have been determined at ₹87.86, ₹109.66 and ₹96.00
respectively. The prices of these three Dal items are the twelve monthly
average prices for the period July, 2014–June, 2015.] The prices of all
items have been sourced from Labor Bureau, Shimla. These prices are
used in the calculation of the CPI (IW) and subsequently the calculation
of Dearness Allowance. In the current exercise the prices of all items
are for the period July 2014-June 2015 and have been used in the
calculation of DA at 119 percent operative from 01.07.2015.
Step 3 : The cost of food, clothing and detergent products
obtained from Step 2 has been divided by 0.8 to arrive at a total, of
which 20 percent provides for fuel and lighting expenses. This addresses
the fifth component under para 4.2.3. The fourth component on housing
under para 4.2.3 has not been addressed at this stage as its
quantification at the final stage of pay estimation is considered more
appropriate by the Commission.
Step 4 : The cost estimated from Step 3 is divided by 0.85 to
arrive at a total, of which 15 percent is towards recreation, ceremonies
and festivities. The prescribed provision of 25 percent to cover
education, recreation, ceremonies, festivals and medical expenses has
been moderated to 15 percent because expenses on educational and medical
necessities are being separately provided for through relevant
allowances and facilities and thus need not be provided here. This
partially addresses the first of the two components outside the 15th ILC
norms.
Step 5 : The cost estimated from Step 4 is increased by 25
percent to account for the skill factor, following the reasoning that
there is no unskilled staff in the government after the merger of Group D
staff in Group `C’. This addresses the second of the two components
outside the 15th ILC norms.
Step 6 : The cost estimated from Step 5 is divided by 0.97 to
arrive at a total, of which 3 percent provides for housing expenses.
This is done in view of the observation that license fees for government
accommodation is about 3 percent of the total pay. This addresses the
fourth component stated under para 3 but partially so, as the 15th ILC
norms had fixed the housing provision at 7.5 percent.
Step 7 : The cost estimated from Step 6 is as on 1 July, 2015
when the DA was 119 percent. The DA is assumed to be 125 percent as on 1
January, 2016, the day from which the Commission expects its
recommendations to be implemented by the government. Accordingly the
cost estimated from Step 6 has been increased by 3 percent (2.25/2.19 =
1.027 or nearly 3%).
Authority: http://7cpc.india.gov.in/pdf/sevencpcreport.pdf
