Sixth CPC Report :(i) Dearness Allowance

26 03 2008

The Sixth Central Pay Commission (CPC) has devoted fourth chapter of the report to the subject of Dearness Allowance (DA) payable to government servants. The sanction of Dearness Allowance is at present based on calculated six monthly increase in the All India Consumer Price Index (Industrial Workers) (AICPI-IW) with base year 1982=100. At the time when the scales granted by Fifth CPC came into existence (1st Jan.1996) this index stood at 306.03.

Fifth CPC started with calculation of DA @ 0% . from 1st Jan.1996 . In the month of April 2004 the rate at which DA was admissible had crossed the figure of 50% and therefore based on recommendations of the Fifth CPC 50% DA was merged in the basic pay . This addition to basic pay was known as Dearness Pay. .Thereafter every increase in DA was calculated on (Basic Pay + Dearness Pay). It has been observed that since after the merger of dearness pay with basic pay the base for calculation of increase in AICPI was not changed the neutralization in cost of living was presently being done at a rate higher than 100%.

Commission has pointed out that the present method of calculation for increase in cost of living takes into account the price rise in a group of identified commodities. It has compared the relative merits of “chain based” and “fixed base” methods of calculation of estimated growth in cost of living. The AICPI as stated above is based on the increase in cost of a basket of identified commodities. In the fixed base method the calculations are based on the assumption that consumer would adjust his consumption needs in relation to increase or decrease in prices of the constituent commodities. The chain based method takes into account the possibilities of change in consumption pattern due to availability of wider range of consumption goods and the improvement in the quality thereof due to economic growth. The latter methodology has been considered to be more relevant in today’s economic scenario.

However the basic data for the pattern of consumption in respect of several essential commodities would have to be compiled through a detailed all India survey if this methodology is to be adopted . The previous Pay Commissions had different views on this matter. The Fourth CPC favored evolution of a separate index for calculation of cost of living for the government servants. The Fifth CPC however felt that such index would also suffer from imbalances since consumption patterns of various categories of employees would be different. The Sixth CPC has suggested a sample survey through National Statistical Commission for evolving an index based on consumption pattern of government employees. Till this exercise is completed the present methodology of calculating the increase in cost of living and calculation of DA would continue.


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41 responses

27 03 2008
shivaji choudhury

PLEASE SEE MY VIEW IN
http://www.salaryfunda.blogspot.com

27 03 2008
glowfriend

Thanx for visit

31 03 2008
Implications for Sixth Central Pay Commission Report | DesiPundit

[…] is writing a series of detailed posts on the CPC’s implications. Part 1, 2, 3, and 4 are already out. Keep an eye out for […]

31 03 2008
nagarajan

sir

can you tell for pay fixation purpose what will be the DA rate as on 1-1-06

thanks

6 04 2008
Popular Weekly Links Mar.24 - Apr.05 | DesiPundit

[…] Sixth Pay Commission Report was released recently. Glowfriend provided a fine multi-part analysis of the implications of the report [posted by […]

11 04 2008
ravi

When will we recieve the revised salary as per the sixth pay commission….

11 04 2008
ravi

When will we recieve the revised salary, revised by sixth pay commission

11 04 2008
glowfriend

After the report is accepted by the Govt

19 04 2008
KSHITISH DASH

whatever may be the hike in pay, no govt servant will never be content with his salary. the price rise will take everything from your pocket. if you try to cover your head with the blanket then your feet will remain bare and viceversa.

20 04 2008
glowfriend

Jobs in the Govt sector / pvt sector cannot be compared on a common scale, it is a matter of individual perception.

15 06 2008
Mitt2r

What is the formula for calculatiion of arrears for pensioners?

15 06 2008
Mitter Hetesh

What is the formula for calculation of arrrears of pensioners?

14 07 2008
ashutosh

Schedule B companies are at loss,

14 07 2008
K.P.Ghosh

Still we the Railway Pensioners are in dark that when the recommendation of 6th cpc shall invoke and how much D.A. will be accepted. And from which date the same shall be introduced.

15 07 2008
glowfriend

Maybe your wait would be over after sometime. Also I am not well versed in Pension matters.

25 07 2008
K.P.GHOSH

In accordence to the present political situation,it is presummed that Govt.may redress the discontentment of the railway pensioners’.Pension should hike atleast 40%.presently it is nearly 15%to16%.merger of 50% D.A. only may hike our pension only.

25 07 2008
glowfriend

Let’s see

7 08 2008
K.P.Ghosh,Gen Secy.Rly Pens.

From different corner it is heard that in next cabinet meeting our fate will be decided by the Govt. Is it true?If anyone can say,may write to my Mail

7 08 2008
K.P.Ghosh

Any body may write to me or speak to me about 6th c.p.c. My mobile +919431779242 & krishnaghosh2007@gmail.com

10 08 2008
glowfriend

Did you get any calls Mr. Ghosh? Any update ?

10 08 2008
K.P.Ghosh

No, I have not received any letter or any written information from any corner,but I use to logon site http://www.rrewa.org and at that site all informations regarding 6th C.P.C. are available.
All circulars may be seen at rrewa.org.

13 08 2008
M R Seshan

At present DA/DR is allowed ignoring the decimal point i.e. 4.93 4% is allowed. Next increase is 10.63 but allowed only 10% We should insist on the GOVT to sanction 5% and 11% when the decimal point is 50 or more. In otherwords, the DA/DR should be 5% and 11% Like that every increase should be allowed. By ignoring this, the employees and pensioners are put to loss. Can this be taken up?

14 08 2008
K.P.Ghosh,Genrl Secretary,Rly Pensioners' Association,Madhupur.

If the Govt.Of India decided to impliment 6th C.P.C. w.e.f.01/01/06 a tune of 30 thousand billion of rupee shall have to pay. Whether GOI will accept? Or otherwise it will invoke w.e.f. 01/01/2007. I think today in Cabinet Meeting the matter will decide.

14 08 2008
glowfriend

Finally the wait is over.

16 08 2008
Surendar V

Hi to all , i am surendar , previously form jan 16 2006 to may 15 2008 i was working in cdac which is under control of ministry, now i resigned the job . i need to know weather i will get the arrears amount for my service during that period as central govenment employee, also i need to know one more thing, from jan 16 2006 to may 1 2007 i served as project engineer in cdac which is consolidated pay of 18000, and from may 1 2007 to may 15 2008 i served as member technical staff where my payscal ranges from 8000-275-12000, pls tell me will i get my arrears. if yes approximately how much i will get.

16-jan 2006 to 15 jan 2007 Project engineer 18000 consolidated pay
16-jan 2007 to apr 31 2007 Project engineer 19000 consolidated pay
may 1 2007 to jan 15 2008 Member technical staff 8275 basic in a1 city (Chennai)
jan 16 2008 to may 15 2008 Member technical staff 8550 basic in a1 city(Chennai)

Thanks with regards

Surendar V

16 08 2008
glowfriend

Sorry Mr.Surendar,We do not provide service of this nature

18 08 2008
S Chakraborty

Are the employees of consolidated pay will also be affected by 6th CPC report?

19 08 2008
K.P.Ghosh

Any body can say that what will be the DA/DR w.e.f. 01/01/2006. for serving railway employees & retirees?

23 08 2008
S.SAM DANIEL

THE UNJUSTIFIED REDUCTION IN THE PERCENTAGE OF DEARNESS ALLOWANCE WITH EFFECT FROM 1-1-2006!

Dear Readers!

The Present Percentage of DA is as follows.
From 1-1-2006- 24%
From 1-7-2006-29% [5%]
From 1-1-2007-35% [6%]
From 1-7-2007-41% [6%]
From 1-1-2008-47% [6%]
From 1-7-2008-55% [8%]

The Proposed Percentage of DA by the 6TH Pay Commission is as follows.
From 1-1-2006-No DA
From 1-7-2006-2%
From 1-1-2007-6% [4%]
From 1-7-2007-9% [3%]
From 1-1-2008-12%[3%]

It can be seen that from 1-7-2006, the Percentage is reduced by 60%,from 1-1-2007 by 33.33%,from 1-7-2007 by 50% and from 1-1-2008 by 50%.It is stated that the Proposed Percentage from 1-7-2008 is 12% [4%]

At first, the Government propagated that there will be 40 to 50% increase.Then it modified it as 28% increase.Now it says that there will be an average increase of 21%.
According to the available information, the increase expected will be only around 20%.
So, the reduction of the Percentage of DA ranging from 33.33% to 60% is wholly unjustified. Justice demands only a reduction of 20% from the existing DA.

So, the Proposed Percentage of DA on the New Scales of Pay should be as follows.
From 1-7-2006- 4%, from 1-1-2007-5%, from 1-7-2007-5%, from 1-1-2008-5% and from 1-7-2008- 6.5%. So, the total percentage of DA as on 1-7-2008 should be 25.5% and not 16% as propagated.
Will the Central Govt look into this and do justice?

24 08 2008
M.BALAKRISHNAN

sir

Can you tell me for sixth pay allowance of army no. 14821081W.

28 08 2008
kulwant

what is the base point of AICPI-IW on january 2006 to calculate the DA for gov employees.

28 08 2008
B.Annathurai

Dear Sir/Madam, Date:28-08-08
As far as the Scientific & Technological services ( R&D professionals) are concerned, in the S&T/ R&D organisations like DRDO and DAE the Recruitment & Promotion system/scheme applicable is Flexible Complementing Scheme (FCS). But in the same departments there are a lot of non R&D posts of engineering and technical in nature covering group A, B and C services. The recruitment & promotion scheme applicable to these S&T posts of non R&D category is the Merit Promotion Scheme (MPS). As per the existing OM of DoPT, the Pay Scales, the residency periods and the designations under FCS should be same and equal in all S&T departments. Thus a Scientist or Engineer under FCS in DOS, DRDO and DAE won’t be getting less pay than those in other R&D/ S&T institutions/organisations. But for the MPS they are not so defined. The reservation rules of govt. of India for SCs, STs and OBCs are applicable for even class-I posts under MPS in the departments like DAE, DRDO and DOS. Except these three departments, in all other S&T departments wherein the FCS is in operation the reservation rules are covering the S&T posts upto and including class-I service under FCS. Without FCS a department is not defined under S&T/R&D organisation/ institution. Is my observation correct or not?. Kindly clarify it.
Thanking You
By
B.Annathurai,
Secretary, DOS-SC/ST Employees Welfare Association, Mahendragiri, Thirunelveli District, TamilNadu-627111.

30 08 2008
mahendra

The rates of DA are still not clear from the notification for arrears of 6cpc dated 29.08.2008.

10 09 2008
S.Sam Daniel,IPS

WHY THE DISPARITY IN PENSION WITH EFFECT FROM 1-1-2006 AND DENIAL OF NATURAL JUSTICE TO THE POST 1-1-1996 AND PRE 1-1-2006 PENSIONERS BY THE VI CENTRAL PAY COMMISSION AND THE CENTRAL GOVERNMENT?
1. PARITY IN PENSION OF THE PRE AND POST 1-1-1996 RETIREES AND NATURAL JUSTICE TO THE PRE AND POST 1-1-1986 PENSIONERS BY THE V CENTRAL PAY COMMISSION AND THE THEN CENTRAL GOVERNMENT!
The main demand of the Past Pensioners [Retired before 1-1-1986] was for full parity in pension to those who retired during the period from 1.1.1986 onwards. The V CPC in Para 137.13 (PP 1830) had observed as under:-

“While it is desirable to grant complete parity in pension to all Past Pensioners irrespective of the date of their retirement, this may not be feasible straightaway as the financial implications would be considerable. The process of bridging the gap in pension of Past Pensioners (Pre 1986 Pensioners) has already been set in motion by the Fourth CPC when past Pensioners were granted additional relief in addition to consolidation of their pension. This process of attainment of- reasonable parity needs to be commuted so as to achieve complete parity over a period of time.”
In Paras 137.13 and .14 of their Report the V CPC stated that as follow-up of our basic objective of parity, we would recommend that pension of all the Pre 1986 Retirees may be updated by notional fixation of their pay as on 1.1.86 by adopting the same formula as for the serving Employees. This step would bring all the Past Pensioners to a common platform or on the IV CPC pay scales as on 1.1.86. Thereafter, all these Pre 1986 Pensioners can be treated alike in regard to consolidation of their pension as on 1.1.96 by allowing the same fitment weightage as may be allowed to the serving Employees.
The Recommendation of the V Central Pay Commission in making Parity in Pension of Pre and Post 1-1-1996 Retirees and Revising the pension of Pre and Post 1-1-1986 Retirees suitably was accepted and implemented by the then Central Government with effect from 1-1-1996.
Had not both the V Central Pay Commission and the then Central Government had done JUSTICE to the Pre and Post 1-1-1986 Pensioners!

2. DISPARITY IN PENSION BETWEEN THE PRE AND POST 1-1-2006 RETIREES AND INJUSTICE TO THE PRE 1-1-2006 PENSIONERS BY THE VI CENTRAL PAY COMMISSION!

The Disparity in Pension between the Pre and Post 1-1-2006 Retirees and the injustice done by the VI Central Pay Commission and the Central Government to the Post 1-1-1996 and Pre 1-1-2006 Pensioners can be clearly understood by the following facts.

A. Fixation of Revised Pay and Pension in respect of Four Post 1-1-2006 Retirees is given below as per OM FN01/1/2008-IC dt.30-8-2008 and OM FN038/37/08P&PW[A] dt.2-9-2008 of Ministry of Finance,Govt of India.

a.Pre Revised Scale:5500-175-9000 [S10]
Corresponding Revised Scale:9300-34800+Grade Pay
Rs4200 [PB2]

i.Basic Pay:Rs 5500.
Revised Pay: Rs 14430 [10230+4200]
Pension:Rs 7215[50% of Pay]
ii.Basic Pay:Rs.6550.
Revised Pay:Rs16390[12190+4200]
Pension:Rs 8195[50%of Pay].

b.Pre Revised Scale:10000-325-15200 [S19]
Corresponding Revised Scale:15600-39100+
Grade Pay Rs 6600[PB3]
i.Basic Pay:Rs 10000.
Revised Pay:Rs25200 [18600+6600]
Pension:Rs12600[50% of Pay]
ii.Basic Pay:Rs.11950.
Revised Pay:28830 [22230+6600]
Pension;Rs14415 [50% of Pay]

B.Fixation of Revised Pension of Pre 1-1-2006 Retirees by the VI Central Pay Commission as per Memorahdum FNO 38/37/08-P&PW [A] dt 1-9-2008 of the Ministry of Finance,Government of India

The formula fixed by the VI Pay Commission for arriving at the Revised Pension is as follows.

Basic Pay without DP x1.86+40% of the Basic Pay.The Condition is that the Revised Pension should not be less than 50% of the minimum of the Corresponding Revised Scale+Grade Pay.
This Formula could be applied only to Pre 1-1-1996 Retirees.But the Condition that the Revised Pension should not be less than 50% of the minimum of the Revised Pay and Grade Pay cannot be applied to them since they are not covered by the Pay Scales effective from 1-1-1996.
So,the Pay Commission has really intended to apply this formula only to Employees retired from 2-1-1996 to 31-12-2005.
According to the Pay Commission, we are to find out the Corresponding Pay in the Revised Scale by adding the Grade Pay.After finding out the Corresponding Pay,we have to work out 50% of the Revised Pay which will be the Revised Pension effective from 1-1-2006. But the Condition has been wronly worded as ‘The Revised Pension shoud not be less than 50% of the minimum of the Revised Scale+Grade Pay instead of ‘The Revised Pension should not be less than 50% of the Revised Pay + Grade Pay’
So,the Condition has to be modified suitably.

Here,two illustrations are given in respect of Revision of Pension of Four Pre 1-1-2006 Retirees.

1.Basic Pay: Rs 5500.
Pension:Rs. 6215 [2750 [50% of Basic Pay]x1.86+40% of Rs2750]
2.Basic Pay:Rs 6550.
Pension:Rs.7403 [3275[50% of Basic Pay]x1.86+40% of Rs3275]
3.Basic Pay: Rs 10000.
Pension:Rs11300 [5000 [50%of Basic Pay[x1.86+40% of Rs5000]
4.Basic Pay Rs 11950.
Pension:Rs13505.[5975 [50%of Basic Pay]x1.86+40% of Rs 5975]

According to the formula of the Pay Commission, a Pensioner drawing a Basic Pay of Rs 6550 in the Scale of Rs 5500-175-9000[S10] will get only 50% of the minimum of the Revised Scale[Rs 9300-34800-PB 2]+Grade Pay of Rs4200 viz,Rs 7215 and not Rs 8195[Revised for Post 1-1-2006 Pensioner] as Pension!
Similarly,a Pensioner drawing a Basic Pay of Rs 11950 in the Scale of Rs.10000-325-15200 [S19] will get only 50% of the minimum of the Revised Scale [Rs 15600-39100-PB 3]+Grade Pay of Rs 6600 viz,Rs 12600 and not 14415 [Revised for Post 1-1-2006 Pensioner]as Pension!
Why the Pay Commission and the Central Govt have done injustice by applying double standards to the Pre and Post 1-1-2006 Pensioners who belong to the very same Pay Band?

Will not the following variations affect the Pre 1-1-2006
Pensioners permanently?

Basic Pay Rs.5500: Post 1-1-2006 Pensioner will get Rs1000 more per month besides DA!
Basic Pay Rs 6550:Post 1-1-2006 Pensioner will get
Rs 792 more per month besides DA!
Basic Pay Rs 10000: Post 1-1-2006 Pensioner will get Rs 1300 more besides DA!
Basic Pay Rs 11950: Post 1-1-2006 Pensioner will get Rs 910 more besides DA!

CONCLUSION

Is this wide variation between the pensions in the cases of Pre and Post 1-1-2006 Retirees with effect from 1-1-2006 even though they belong to the same Pay Band not against Natural Justice?

Will the Central Government immediately look into this Disparity, do JUSTICE to the Pensioners who retired from 2-1-1996 to 31-12-2005 and issue orders bringing PARITY in Pension of both the Pre and Post 1-1-2006 Pensioners as they belong to the same Pay Band?

15 09 2008
Rajalekshmy K.

Calculating Avg salary for 10 months has been removed for calculating
retirement benefits like Gratuity and Encashment of E L but for calculating pension
benefits the same method is in force.Is it true?

15 09 2008
Rajalekshmy K.

Those who have retired after Dec 2005,may get much less pension than those retiring before Dec 2005 if the avg 10 mths salary method is used for calculating pension.
For e.g for those with basic pay of Rs.11950 as on1st jan 2006 , increment month also Jan, will be getting a basic pay of Rs.28870. according to the 6th pay comm.Hence pension should work out to Rs.14435.,but it is only Rs.11114.as per the Calculators provided.If one deducts commuted portion from this amount there willbe a balance of Rs.7594.U may add DA OF 16% on Rs.11114 to this amont and arrive at a fig of Rs.9372.,which is less than Rs.9408. which the person is receiving now.what will
be left with him if he opts for another commutation which has become due to him
after basic pay revision .I request ur enlightened susbscribers to give their versions.

17 09 2008
dr satish sonawane

respected sir,
i m a surgical oncology registrar( resident cancer surgeon) at Tata Memorial Hospital, Mumbai( a central govt. institute under DAE) on consolidated pay since last three years.
Am i entitled for the sixth pay revision scale?
thanks,

9 07 2009
BSKN Srinivas, URC, Kakinada

As we are Unit Run Canteen (CSD) employees shall we get the 6th pay commission pay scales, DA etc., Please let me know.

20 03 2010
glowfriend

This post is now closed for queries.

20 03 2010
glowfriend

This post is now closed for queries

29 09 2010
Prabhakar

What is the case status of urc employees. AFA Hyd

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