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Saturday, 5 September 2015

Trade unions eye Rs 15,000 per month minimum wage as national baseline

Trade unions eye Rs 15,000 per month minimum wage as national baseline
By Subodh Varma, TNN

One of the key issues on which the negotiations between the government and the 10 central trade unions that had called for a general strike on Wednesday broke down was that of minimum wages. A labour ministry document circulated amongst the trade unions days before the strike, argued that by current norms, prices and calorific needs, Rs.6330 per month is the monthly wage adequate for an unskilled worker with a wife and two small children.

The trade unions and various other federations that represent 15 crore workers had demanded Rs.15,000 per month minimum wage as a national level floor wage. Striking a generous posture, the government modestly increased its proposal to Rs.7098 per month.

What the government had proposed was less than half of what was demanded. This was one of the contributory factors to the breakdown of negotiations. Other demands of the workers included social security coverage, non-interference with existing labour laws, etc.

How did the government calculate their proposal? A look at the fine print shows a slew of gross under-estimations and the use of an archaic formula first spelled out way back in 1957. Some of the food items' prices are far from reality. For instance dal is costed at Rs.65 but only one of the various dals in the market - chana or gram dal - comes in this range. Arhar (tur) is Rs.135 per kg, urad is Rs.117.5, masur is Rs.95. All these current retail prices are from the consumer affairs ministry's price monitoring data spanning 81 cities and towns.

Mutton is priced at a bizarre Rs.80 per kg, although it doesn't really matter because only 50 g is allowed. This is convertible to 250 grams of vegetables which are priced at an imaginary Rs.16 per kg. In the real world mutton is selling at anywhere between Rs.300 to Rs.400 per kg. And rarely if any vegetable sells at Rs.16 per kg.

 But the real rub comes in the non-food items. Just Rs.390 is supposed to be spent on rent every month. And, fuel for cooking and utilities like electricity etc. are all supposed to be covered under a meagre Rs.780.

All education, medical expenses, marriages, care of elderly, recreation etc. is lumped together and costed at 25 percent of the food expenditure. This practice started after the Supreme Court in a landmark judgement in 1991 directed as much saying that if such a minimum wage cannot be guaranteed then the managements have no right to run their business. But even this works out to a mere Rs.980 per month.

Costs of education and healthcare have risen tremendously in the past several years and even one major episode of sickness in the family would be devastating. The government's wage calculation seems to be blissfully unaware of this.

Recent government data shows that real wages, that is, after adjusting for inflation are dipping while the share of wages to profits is also dipping in the organized sector. In the unorganized sector which employs over 90 percent of India's workforce, wages are abysmally low and conditions of work onerous. Small wonder then that the trade unions were unwilling to accept the government's proposals.

Source : The Economic Times

One Rank One Pension : A new wave of expectation rises; Announcements expected in 48 hours

One Rank One Pension : A new wave of expectation rises; Announcements expected in 48 hours

“Although there is no official confirmation from the government, the ex-servicemen’s United Front are ready to accept the demand if it comes with a once-every-two-years pension revision, instead of five.”

Implementation of One Rank One Pension : After crossing multiple hurdles the One Rank One Pension scheme is stuck at one final block. The Government has clarified that it was impossible to revise the pension each year. It is ready for a revision once every five years. But, there are talks that the Government would relax its stand and agree to revise the pension once every two years.

“There is no confirmation from the Government side, but if they agree to revise the pension once every two years, we will accept the term” Major General (Retd) Satbir Singh, who is heading the protests, said.

Sources claim that a section of the ex-servicemen are not ready to accept the once-every-two-years revision. They want to call a general body meeting and discuss it.

Months, weeks, and days have gone. The announcement from the government is now expected in 48 hours. But, there is always the question of whether one should or shouldn’t trust these news.

Many wonder why the demand, that had remained pending for years, suddenly gained momentum and force now. Plenty of reasons are also being attributed to it. Here are the two most important ones –

1. The fact that Modi had voluntarily offered to implement the OROP if he is voted to power. OROP was also included in his election manifesto.

2. Defence pension has not been revised for more than seven years, since the recommendations of the 6th Pay Commission came into being. Thousands of army personnel who had retired before 2006 have not been given any pension revision until now. The Government’s refusal to heed to the countless talks, cases, and judgements of various courts has brought the crisis to this stage.


Seventh Pay Commission likely to see pay hikes by 40%

Seventh Pay Commission likely to see pay hikes by 40%

New Delhi: The Seventh Pay Commission’s report is likely be submitted to the Finance Minister Arun Jaitley shortly.

Sources said that there will be no internal relief. The average increase in basic fair pay for all government employees will be in the region of 40-45%.

This is a very rough average because for senior level officers, like the Cabinet Secretary or officials at the secretary level, the payback could increase by more than 50%.

The Pay Panel may recommend a new pay scale from January 1, 2016. The existing HRA would be retained for A1 cities; while there would be a 15-20% hike for other cities.

But interestingly when we spoke to government employees they were not really happy, essentially perhaps because effectively if you take the DA out, it is not really a hefty bonanza as many thought it would be.
Also, given the price rise and inflation issues, most people are saying it is really not that sufficient. Most of these recommendations will be implemented.

But the point is, if the Finance Minister Arun Jaitley has a problem with any of the observations or with the impact of the Pay Commission recommendations, he might even send this back to the Pay Commission for another round of iteration.

In that case, some amendments will be made that come back to the Finance Ministry and then it may go back to the Cabinet for approval. If that happens, it could delay the process by about 1-2 more months.
A central government employee will earn up to 40% more if the government accepts the Seventh Pay commission’s proposals, which will be submitted shortly.

This pay hike would affect the lives of over 48 lakh central government employees and 55 lakh pensioners and could trigger off similar pay hike across state governments as well.

An official of the Pay Commission, says recommendations will be made to improve productivity.
The Commission will be talked of market driven compensation at the top level, where there are expert persons required by the government. There should be open competition with the public. If they have a better candidate from outside, he should be appointed instead of simply promoting people by seniority, said the official.


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