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