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Thursday, 18 June 2015

7th Pay Commission Fitment Formula and Minimum Wage Calculations: Updates by Karnataka COC

Minimum Wage and Fitment Formula.

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 accpeted 70% of the staff side demand. Especially NC JCM Staff Side demands to fix minimum wage at Rs.26000.


The Staff Side (JCM) has calculated minimum wage as on 1st Jan 2014 as per the Dr. Aykroyd formula as Rs 26,000/- taking into following prices.

Table 5.1

 

PRICES OF THE INGREDINTS SPECIFIED IN TEH 15TH ILC TO CALCULATE THE MINIMUM WAGES AS ON 01.05.2014




ITEMS
D
E
L
H
I
M
U
M
B
A
I
K
O
L
K
T
A
C
H
E
N
N
A
I
B
A
N
G
A
L
O
R
E
B
H
U
B
A
N
E
S
H
W
A
R
T
R
I
V
A
N
D
R
U
M
H
Y
D
E
R
A
B
A
D
A
V
E
R
A
G
E
PCU
/day
in
gms
Per
Month
3
CU
(inKg)
Rice/Wheat
44
49
44
48
47
58
42
44
47
475 gms
42.75 kg
2009
Dal (Toor/Urid/Moong)
99
102
140
100
97
97
95
94
103
80 gms
7.2 kg
742
Raw Vegetables
44
46
41
40
42
50
48
41
44
100 gms
9.00 kg
396
Green Vegitables
42
43
40
42
42
43
44
40
42
125 gms
11.25 kg
473
Other Vegitables
43
43
41
40
40
41
49
40
41
75 gms
6.75 kg
277
Fruits
111
114
108
112
109
108
108
109
110
120 gms
10.8 kg
1188
Milk
44
44
39
39
36
36
36
38
39
200 ml
18 ltr
702
Sugar/Jaggery
44
43
42
44
45
44
46
44
44
56 gms
5.00 kg
220
Edible Oil
148
159
142
159
142
141
141
140
138
40 gms
3.6 kg
497
Fish
315
325
315
375
305
310
335
320
325
2.5 kg
813
Meat
423
420
438
388
403
397
398
488
425
5.0 kg
2125
Egg
5
5
5
5
5
5
5
5
5
90 Nos
450
Detergents
404
414
379
399
379
399
399
399
396
396
Clothes
198
203
178
198
178
198
198
188
192
5.5 mtr
1056
Total
11344
Housing @ 7.5%
1174
Miscellaneous @20%
3129
Total
15647
Additional @ 25%
5214
Grand Total - Minimum pay for unskilled worker in the erstwhile Group D
20861
Minimum pay for Group C added with 25% with the minimum of above
5214
Minimum Pay at Group C level
26075
Rounded off to
26000


The 7th CPC also would adopt Dr. Aykroyd 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 that 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 7 % likely hike in prices for the period 1st July 2015 to Jan 2016 it works out to 25% hike in minimum wage.

Minimum wage calculated by the Staff Side (JCM) using Dr. Aykroyd formula as on 1st Jan 2014 was Rs 26,000/-

Adding 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 Rs 27,000/- and
 fitment formula as 3.85.

 



There are many rumors on 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 the account the prices as on 1st July 2015 and adding weight age for the period 1st July 2015 to Jan 2016 and work out the fitment formula and minimum wage.


If any fitment formula less than 3.85 and minimum wage of Rs 27,000/- it will be denial of right wages for CG employees.  

During the 6th CPC the Staff Side (JCM) has calculated minimum wage as on 1st Jan 2006  as per the Dr. Aykroyd formula as Rs 10,000/-, where as the 6th CPC had provide 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

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