7th Pay Commission Fitment Formula and Minimum Wage Calculations – Karnataka COC
Shri.P.S.Prasad General Secretary of COC Karnataka expressed his views about the calculation of fitment formula and computation of minimum wage of 7th CPC on its blog. He hinted in this article that most of the pay commissions have accepted 70% of the staff side demand. Especially NC JCM Staff Side demands to fix the minimum wage at Rs.26000. We reproduced the complete article and given below for your information…
Minimum Wage and Fitment Formula
The Staff Side (JCM) has calculated the minimum wage as on 1st Jan 2014 as per the Dr. Aykroyd formula as Rs 26,000/- taking into the following prices.
The 7th CPC also would adopt Dr. Aykroyd’s formula for the computation of the minimum wage and thereafter the fitment formula is calculated.
Fitment formula = Minimum wage / Rs 7000
The Staff Side (JCM) has calculated the fitment formula of 3.72 which is Rs 26000/ Rs 7000 as on 1st Jan 2014.
The 7th CPC has hinted that the date of effect of the 7th CPC shall be from 1st Jan 2016. In this context, the minimum wage and fitment formula should be as follows.
The increase in prices between 1st Jan 2014 to 1st July 2015 is 18% as the DA as on 1st Jan 2014 was 100% and likely DA as on 1st July 2015 is 118%, In actual terms, the retail prices have increased by over 25%. Even considering the 18% hike in prices from 1st Jan 2014 to 1st July 2015 and adding a 7% likely hike in prices for the period 1st July 2015 to Jan 2016 it works out to a 25% hike in the minimum wage.
The minimum wage calculated by the Staff Side (JCM) using Dr. Aykroyd’s formula as on 1st Jan 2014 was Rs 26,000/-
Adding a 25% hike in prices between 1st Jan 2014 to 1st Jan 2016, the minimum wage should be Rs 32,000/- and accordingly the fitment formula should work out to 4.5 times.
If we calculate the minimum wage as on 1/1/2016 using the Dr. Aykroyd formula taking into account the current retail prices in Bangalore. It works out as Rs. 27,000/- and the fitment formula as 3.85.
There are many rumors about the fitment formula and minimum wage, actually, the 7th CPC has made only a draft and they will calculate the actual fitment formula and minimum wage only next month taking into account the prices as on 1st July 2015 and adding weightage for the period 1st July 2015 to Jan 2016 and work out the fitment formula and minimum wage.
If any fitment formula is less than 3.85 and a minimum wage of Rs 27,000/- it will be a denial of the right wages for CG employees.
During the 6th CPC, the Staff Side (JCM) calculated the minimum wage as on 1st Jan 2006 as per the Dr. Aykroyd formula as Rs 10,000/-, whereas the 6th CPC had provided the minimum wage as Rs 7000/- and the 6th CPC had fixed fitment formula of 1.86. Most of the pay commissions have accepted 70% of the staff side demand. We sincerely hope this 7th Central Pay Commission will also calculate the right wages and fitment formula for the Central Government Employees.