THE ASSAM PAY COMMISSION

Transcription

1 Report of THE ASSAM PAY COMMISSION 2008 October 2009

2 Preface The Assam Pay Commission, 2008 was constituted in the middle of the year 2008.The Commission is conscious of the fact that nearly eight years of the 21 st century has passed before the Pay Commission started functioning. This is an age of rapid changes, both in technological advances as well as in expectations of the people from the government. There has been a sea change in the very idea of governance. Inclusive and growth oriented Legislations such as the National Rural Employment Guarantee Act have brought in the Panchayati Raj Institutions, Gaon Sabhas and Gaon Panchayats, as principal actors in implementation of various developmental schemes under the Act. On the other hand non-governmental organizations and civil society have been given responsibility for social audit of the schemes under NREGA. Thus, the Government, with its twin objectives of welfare and development of society, is now exposed to much closer public scrutiny. In the private sector, after opening up of the bulk of the economy, a new paradigm of service has come about, redefining the concept and the term. The people, as consumers are far more aware of their rights, and demanding of appropriate services. The Commission takes note of all these events and the government machinery and the employees cannot in these circumstances remain cocooned in their offices. With the coming into force of the Assam Fiscal Responsibility and Budget Management (AFRBM) Act and the Right To Information (RTI) Act, the relationship between the governed and those who govern has been put on a different platform and the expectations of stakeholders are far higher. These areas pose major challenges which have to be met. The administrative machinery, therefore, has to bring about a vast change in its outlook on service delivery, and that too under stricter fiscal discipline. No doubt at the time of recording these lines the country including this state is going through a recessionary phase and a measure of fiscal flexibility has been found necessary or may be so found in the near or medium term, but in the long run fiscal discipline will have to be more stringent and service delivery cannot be compromised on ground of financial imperatives. Thus the Commission had to strike a balance between a suitable pay package for the employees which would be instrumental in better service delivery and capacity of the government to bear the additional burden arising out of the Commissions recommendations. Although the Terms of Reference of the Assam Pay Commission, 2008 do not directly require the Commission to deal with issues such as reforms in the government and its diverse arms to transform them into modern, professional and citizen friendly entities that are dedicated to the service of the people, the Commission is of the view that it cannot be oblivious of such issues since restructuring of services is one of the terms of reference. The Commission hopes

3 that its recommendations shall be instrumental in heralding new changes in the business of the state. This Pay Commission, therefore, had not only to evolve a proper pay package for the State Government employees as the previous Commissions have done but also to make recommendations rationalizing the governmental structure with a view to improving the delivery mechanisms for providing better services to the common man. The emphasis has been on making recommendations that will enable the Government to evolve a system that primarily lays emphasis on delivery and end results and which continuously rewards performance. It is expected that Government will put in place a suitable mechanism for better provision of services, the outline of which is included in the Report, incorporating features like variable increments in the basic scheme of pay scales. Another such innovation is the proposed scheme of running pay bands which would bring more flexibility. The most important and overarching novel feature is that the recommendations of the present Commission are put forward as a package, in which revised pay scales and other benefits to State Government employees are suggested to be implemented along with systemic changes in the existing procedures in order to ensure the emergence of a young and dynamic bureaucracy, with a result oriented approach. While proposing these changes, the Commission has also kept in view the capacity of the Government to pay and the principle that every rupee spent on salaries, allowances, and facilities of Government employees has to translate into a specific measure for public good. It is our belief that the Report will lead to a realization that it is only the ultimate outcome and delivery to the last beneficiary which will justify the huge Government edifice and the very large amount of tax payers money spent on it. The Report should, therefore, not only result in increased pay and allowances of Government employees but also prove beneficial for all the people of our state who are waiting expectantly for much out of this process of pay revision. Although it is true that it is the Commission which is placing these suggestions on record, but it is not the Commission which is saying that the pay and benefits package should result in better service to the people; it is being said by the present times. Let all concerned remember that no one can stop an idea whose time has come. In conclusion the Commission is constrained to put on record one aspect relating to its constitution. By now it is an accepted fact, at least on the part of government employees, that their pay and other benefits should be revised once at the end of a decade. It is appropriate to mention that if in future Pay Commissions are to be set up, it will be prudent to constitute these in time so that future Commissions may be afforded sufficient time to examine thoroughly all relevant matters.

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5 Index Serial No. Contents Page No. 1. Introduction Philosophy and guiding principles Financial resources Principles of Pay Determination General recommendations on the pay structure 2.2 Increment Based On Performance (IBOP) Allowances and Special Pay Benefits to women employees and disabled employees 3.2 Other benefits Pension and Other Retirement Benefits Leave Matters Holidays and Office Timings Reorganization of Services Training and Administrative Reforms Financial Implications Department wise Recommendations Executive Summary of the Report Concluding Remarks Acknowledgements Annex Separate Volume

6 Chapter 1 Introduction Constitution of the Assam Pay Commission,2008 Composition of the Commission Terms of Reference 1.1 The Government of Assam constituted the Assam Pay Commission, 2008 vide Resolution No. FPC.16/2007/16 dated 30 May, 2008.(Annex 1.1) 1.2 The Assam Pay Commission, 2008 was constituted with Chairman and four other Members as under : Chairman Member Member Member Member- Secretary Shri Bhaskar Barua Chief Secretary, Assam Shri S.M.Deka Shri Shantikam Hazarika Principal Secretary, Finance, Assam Shri R.C.Joshi, Secretary, Finance was appointed as Secretary, Assam Pay Commission vide Notification No FPC. 16/2008/11 dtd 23/6/2008. Shri Vishal Solanki was appointed as Deputy Secretary, Finance vide Notification No.AAI.56/2006/72 dtd 3/7/2009. Shri Solanki assisted the Commission on full time basis. 1.3 The Terms of Reference of the Commission are as under : (i) To examine the principles which should govern the structure of emoluments and conditions of service of the State Government employees, excluding the All India Services, posts drawing UGC/ AICTE pay scales of Degree Colleges/ Engineering Colleges/ Medical Colleges/ Nursing College/ Ayurvedic College/ Pharmacy Institute/ Polytechnics. The Judicial Service Officers drawing pay scales as per recommendation of the Shetty Commission will also be excluded. (ii) To examine and recommend changes in the structure of emoluments and conditions of service of different classes of State Government employees which are desirable and feasible taking into account the historical background,

7 Special Features of Terms of Reference the economic conditions in the State, the implication and requirements of development planning, additional resources for investment against expanding requirement of employment in the State, financial position of the State, recommendations made by the Sixth Central Pay Commission in respect of the Central Government employees, relevant provisions of the Assam Fiscal Responsibility and Budget Management Act, 2005 and all other relevant factors. (iii) To suggest re-organization of the existing services with a view to improve rationalization of workload and efficiency. (iv) To examine existing amenities and facilities etc., given to State Government employees, such as Age of Superannuation, Death-cum-Retirement benefits, Special Pay, Compensatory Allowance, Medical Benefits, Travelling Allowance, Daily Allowance etc. and to make such recommendations as are considered desirable and feasible. (v) To examine and suggest the principles to be followed in granting relief to the State Government Pensioners linked with changes in Consumer Price Index. (vi) To examine such other connected and incidental questions as may be referred to the Commission by the Government. 1.4 A significant factor is that this Commission was functioning in the shadow, so to say, of the recommendations of the Sixth Central Pay Commission, which had aroused considerable expectations, coupled with various pronouncements made from time to time in different quarters. The Terms of Reference mentioned above explicitly refer to the recommendations of the Sixth Central Pay Commission as one of the factors to be taken into account. Various associations of employees also demanded implementation of Sixth Central Pay Commission recommendations in the state. Secondly, though posts drawing UGC/AICTE scales are excluded from the purview of the Commission, it was necessary to keep in mind the relative impact of those scales on state government employees who

8 Guiding Principles Measures adopted to achieve desired objectives are not covered by these scales but are working in the same department. Thirdly, the Terms of Reference require that the provisions of the Assam Fiscal Responsibility and Budget Management Act, 2005 be taken into account as the pay structure needs to be in conformity with basic norms of fiscal prudence. All these factors had to be taken into consideration while arriving at the basic principles of pay determination. 1.5 Thus the Terms of Reference of the Commission are somewhat different from those of the earlier Pay Commissions. The Terms of Reference envisage transforming the State Government organizations into modern, professional and citizen friendly entities that are dedicated to the service of the people. While the earlier Commissions were required to examine the work methods and work environment and to suggest rationalization and simplifications therein with a view to promoting efficiency and optimizing the size, it is for the first time that this Pay Commission has been asked to look into the measures that would improve the delivery mechanisms which have a direct bearing on the services provided by various Government agencies to the common citizens. Provisions of the AFRBM Act make it incumbent upon the Commission to harmonize the functioning of the State Government organizations with the demands of the emerging economic scenario and financial position of the state. The Assam Pay Commission, 2008, therefore, had not only to evolve a proper pay package for the Government employees but also to make recommendations rationalizing the governmental structure with a view to improving the delivery mechanisms for providing better services to the common man. In addition, linking the pay package with simplification of systems and processes within the Government, greater delegation with emphasis on accountability, responsibility and assimilation of technology, etc. have been the Commission s guiding philosophy. 1.6 The Commission, in this Report, plans to achieve these objectives through rationalisation of layers within the Governmental structure so that decision making and delivery are expedited. In the process, a number of levels considered unnecessary have been removed. This simplification is also reflected in the

9 entire scheme of pay scales being substituted by a system of running pay bands, where the existing 30 pay scales have been replaced by 5 running pay bands containing 30 grades. A system that primarily lays emphasis on delivery and end results and which continuously rewards performance has been put in place by introducing features like Increment Based On Performance (IBOP) in the basic scheme of revised pay. By incorporating suggestions for systemic changes in the existing procedures of appointments, efforts have been made to ensure emergence of a young and dynamic bureaucracy, with a result oriented approach. While proposing these changes, the Commission has also kept in view the capacity of the Government to pay and the principle that every rupee spent on allowances, facilities and salaries of Government employees has to translate into a specific measure for public good. Major recommendations are made regarding reorganization of services which include creation of Assam Administrative Service etc. Significant changes are recommended in the current office timings which would improve work culture in Government offices resulting in better service delivery. The Commission, at the very outset, would like to underline the fact that this Report is a holistic document and only implementation of the recommendations relating to the pay revision devoid of effective action on the systemic changes recommended would defeat the spirit of the report. Accordingly, any modification in the scheme of recommendations can severely affect the outcome this Report sets out to achieve. Methodology 1.7 The Terms of Reference permitted the Commission to devise its own procedure. To elicit the views of various stakeholders, the Commission issued a public notice inviting all interested persons, members of the public, employees' associations, Government departments to send their views on the subject by October A questionnaire was also prepared to facilitate responses from Individuals/Groups on the items of specific interest to the Commission with facility for online response. The Commission received in total 256 memoranda from various associations of employees as well as individuals. From December 2008, the Commission initiated meetings with representatives of various

10 Visits Working of the Commission associations of employees, stakeholders, and individuals to hear their views and demands on related issues. During these hearings, a considerable number of documents were handed over to the Commission. The list of Associations/ individuals heard by the Commission is at Annex The Commission visited several establishments in different parts of the state to get insight into the functioning of field machinery and the conditions of service prevailing there. The Commission visited Dhubri, Kokrajhar, Bongaigaon, Silchar, Hailakandi and Karimganj districts including rural areas therein. During these visits, the Commission also interacted with a large number of field level functionaries. Meetings were held to facilitate stakeholders staying in distant areas to present their views personally before the Commission and also to ensure larger representation. During these meetings, the Commission also got the benefit of hearing the views of district level officers and staff which helped to appreciate better the ground realities faced by the employees. 1.9 It may be appropriate to consider the background of pay revision in the state. Beginning from the first Commission, the earlier Commissions had taken a minimum of two years and up to three years in one case to submit their reports. The Assam Pay Commission, 2008 was initially given a period of 12 months to submit the Report which was extended by four and a half months. The Commission initiated its work immediately after the date of its Notification on 30th May, sittings were held. The Commission was able to finish its task well within the stipulated time-frame. The Secretary of the Commission also held the charge of Finance Secretary. One Deputy Secretary and one Officer on Special Duty of the Pay Research Unit of the Finance Department and one Senior Research Officer of the Directorate of Economics and Statistics were the additional support available. Towards the end of the period of functioning of the Commission, for about three months from middle of July, the service of one other full time Deputy Secretary was available to the Commission. This has to be viewed vis-à-vis the strength of the Central Pay Commissions. The Fourth CPC had 209 posts. The Fifth CPC had a total sanctioned strength of 141 posts (out of which 135

11 posts were filled up). In case of the Sixth CPC, 48 posts were sanctioned, and 17 posts were filled up. The Assam Pay Commission was able to achieve its target with the staff as available, due to the dedication and sincerity of the Non-official members, who shouldered the task of writing sections of the Report and the invaluable support received from Shri R. C. Joshi and Shri Vishal Solanki in the functioning of the Commission. Details of the previous Commissions are given at Annex 1.3.

12 Chapter 1.1 Philosophy and Guiding Principles Introduction Pay revision The State Government constituted the Assam Pay Commission, 2008 at a time when the state has been going through dynamic changes in the spheres of the society, the economy, trade and commerce and last but perhaps most importantly, in the expectations of the people. The economy of Assam is rapidly getting integrated not only with that of the country but also with that of the world. The principal role of the Government is presently perceived to be that of a provider of basic services such as security, disaster management, health, education, sanitation and water supply, food security, and a facilitator and regulator of economic activities. An imperative and urgent need exists to harmonize the functioning of government machinery with the demands of the emerging social and economic scenario. In discharging the functions of governance, the State Government employees have to be more professional, cost-efficient, citizen-friendly and delivery oriented. Full and fruitful utilisation of knowledge and technology for more effective performance under stricter fiscal discipline and better delivery mechanisms has to be the guiding mantra in this century The Commission deliberated in depth on the issue of pay revision in the context of the state s general economic conditions and the financial resources of the State Government. The Commission considered the question of revising the pay package of the Government employees in the background of the per capita income of the state and the information available to the Commission regarding the financial situation of the Government. That there will be revision of pay is the universal expectation amongst the employees and Chief Minister has already announced that Central scales of pay will be adopted. On the other hand, the Commission believes, and the state government has clearly adopted the policy as a welfare state, that the well being of the people of the state is of high priority. While attempting to reconcile these two objectives, which might appear contradictory, the Commission

13 feels that performance is the key to the solution of this situation. The Commission has, therefore, laid considerable emphasis on performance by the State Government employees which will lead to higher productivity, and observes that it is through improved performance that the employees can justify the higher package of remuneration expected. It is equally through insisting on higher performance that the State Government can expect to, at least partially, garner larger resources to bear the burden of higher outgo on pay revision. Increment Based On Performance (IBOP) Minimum salary The Commission has recommended several innovative features to ensure better delivery systems in the Government with emphasis on end user satisfaction which is the primary criterion for judging the effectiveness of an organization. The efficacy of governance is to be judged mainly by performance. Introduction of Increment Based On Performance (IBOP) is a step in this direction. This is not a new concept. Various commissions as well as expert committees in the past have recommended performance related incentives in one form or the other. In this Report, the Commission has tried to devise a workable and practical model by which the concept can be implemented by the Government. The IBOP recommended by this Commission envisages a component of variable annual increment, over and above the normal increment, for higher performance that would be judged by another innovation recommended by this Commission. This is the system of regular Annual Open Assessment of officers and staff. This scheme of IBOP has been recommended to be implemented in all departments/organisations of the State Government. This scheme of performance related increment is also expected to take care of the cases of those employees who sometimes work for longer hours or for days over and above the normal working days and who requested the Commission to find a suitable mechanism to compensate them. During deliberations, reservations were expressed regarding practicability of IBOP For fixing minimum salary, the Commission has mainly been guided by various factors like providing salary and allowances at a level which would ensure a living wage, keeping in view the capacity of the

14 Salaries in higher grades Running Pay Government to pay etc. Factors such as the inflationary impact of such an increase on the economy in general and on the State Government in particular and the fact that the minimum salary in Government is available at the entry level when an employee is single or married with a nuclear family, have also been taken into account. A fair comparison based on principles of equity and social justice, also makes it imperative to take into account the economic conditions of vast majority of the community that are less privileged than Government employees and large sections of whom live below the poverty line. It is also important to take into account the unprecedented recession in the economy from 2008 which has resulted in loss of many jobs in the private sector which is in sharp contrast with the State Government where not only there is job security but also pay revision under consideration. Moreover, the Commission is of the view that Government employees should have a sense of mission, spirit of public service and willingness to contribute value for the remuneration they receive. The Commission has taken all these aspects into account while arriving at a suitable pay structure for the employees. The Table at Annex shows fixation of minimum wage as on as per ILC norm The issue of fixing salaries in higher grades is more complex. Most of the employees, in the memoranda submitted to the Commission, and during the interaction, desired a linkage with the salaries in other sectors on the ground that a broad parity needs to be ensured between all salaries across the board. The Commission has given deep thought to all these arguments. It is undeniable that Government jobs provide unparalleled job security, pension benefits, work-life balance and status. Further, the Government also provides a vast array of nonmonetary benefits that can and should be monetized in order to assess correctly the actual compensation package available to the employees. Quantification of these benefits has other advantages as well. The aspirants for each category of Government job would know beforehand precisely what total package to expect and, could decide for themselves whether the Government job is sufficiently attractive vis-à-vis jobs in other sectors. The Commission has taken all these aspects into account while arriving at a suitable pay package for the employees in higher grades. The Commission also recommends that the Government should set up an expert group to devise a mechanism to calculate the total cost of a Government employee. This will help the Government, the taxpayers and the employees to understand how much an employee actually costs A major departure from the earlier Pay Commissions

15 Bands Fitment benefit Issues related to Pension has been made in respect of the pay structure. For the first time, the Commission is recommending a system of running pay bands as has been done by the 6 th Central Pay Commission and which has been accepted by the Government of India. It is observed that since the individual pay scales, by their very nature, have a limited span, they often lead to stagnation. In such cases, to ease stagnation, promotion avenues have to be created even though no functional justification for higher posts may exist. Creation of additional posts in higher grades does not always achieve the desired results in terms of improved career progression. Movement from one pay scale to another frequently leads to problems in pay fixation like a senior drawing lower salary vis-à-vis a junior. Running pay bands will address all these problems and also remove many of the pay scale related anomalies. Five distinct running pay bands with 30 Grades have been recommended for all Government employees The efforts of the Commission have been to devise a suitable pay package which will not only provide adequate incentive to attract the cream of the youth of Assam to join government service but also to retain the best employees. The quantum of fitment has been decided accordingly. The Commission is recommending a new structure of running Pay Bands and Grade Pay. Grade Pay in the Pay Bands has been kept in the same limits as fixed by Government of India in the corresponding Pay Bands. In most cases, pay in the running Pay Band has been decided as per the decisions of the Government of India The Commission has taken due note of the position of Government pensioners. The pensioners, after spending long years in service, in the evening of their lives, are often placed in pathetic circumstances. Such conditions are brought about due to inflationary trends, reduction in income, and by the fast changing social scenario. No longer can parents always count on their off spring for care and looking after in old age. Many young people now-a-days work outside Assam as there are better opportunities elsewhere. Not all of these youth adequately support their parents, some are unable to do so, and unfortunately in some cases, willingness is also found to be wanting. In view of these circumstances, the Commission recognizes the need to provide greater financial security to the pensioners. Hence the Commission has recommended additional quantum of pension with increase in age. The Commission has also recommended that linkage of full pension with 33 years of qualifying service should be dispensed with. Once an employee renders the minimum pensionable service of 20 years, full pension shall be payable as decided by the Government of India. During the deliberations of the

16 Issue of stagnation Allowances and benefits Implementation of the Recommendations Commission, reservations were expressed in the matter of extending further benefits to the pensioners The Commission received many memoranda from various associations, organizations and individuals highlighting the severe problem of stagnation. The Commission considered various possible measures to address this issue. The provision of the Pay Band system recommended by the Commission will go a long way in mitigating the difficulty of stagnation faced by the employees. It has been observed that the problem of stagnation is most severe in respect of posts which are isolated in nature. It is seen that in many cases, posts were created under some schemes, which were initially for specified period only. However, some of these schemes/posts are still continuing. The departments have found it difficult to integrate these posts with the mainstream posts of the department. The Commission has made recommendations in regard to specific posts to give them some relief. However, this relief is in the nature of Terminal Pay. The Commission recommends that henceforth, recruitment to such isolated posts be done only if required from the functional and legal point of view. The departments may also consider making recruitments to such posts by taking recourse to measures such as contract appointments. The Commission has received demand for creation of new posts for promotion avenues. The Commission is of the view that new posts should not be created without full functional justification Many associations/ organizations placed demands for (a) increase in the quantum of various allowances paid to the employees (b) extending existing allowances to more categories of Government employees. The Commission is of the view that a rational structure of remuneration should not have too many disparate allowances. The Commission has, therefore, rationalized the basket of allowances and introduced some new allowances like Rural Area Incentive for doctors, Disability Allowance etc. in keeping with present circumstances. Further, the Commission has recommended enhanced rates of some allowances like HRA, TA/DA etc. to make them realistic. In the process of rationalization, some allowances such as City Compensatory Allowance, Conveyance Allowance and Special Pay have been discontinued. The Commission has given serious consideration to the problems of women employees and disabled employees in recommending benefits to them The Report has been kept concise as the Commission is of the view that lengthy and elaborate documents tend to get ignored as well as are liable to be

17 quoted out of context. The number of recommendations made by the Commission is also limited. Most of the demands made before the Commission have been addressed by recommending systemic changes. These systemic changes such as IBOP etc. provide the foundation upon which the superstructure of revision of pay and other benefits to the State Government employees is built. Comprehensive and effective implementation of the systemic changes recommended will lay the foundation for a new look administration in Assam in the years to come.

18 Financial Resources Chapter 1.2 General observations The financial resources of the State have been analysed based on information made available to the Commission, in order to assess the situation in the context of revision of pay and allowances of the State Government employees. It is observed that the financial situation of the State can broadly be stated as follows : 1. The tax revenue of the State has shown an increasing trend from Rs Crores in to Rs Crores in It is understood the major factors responsible for the increase in tax revenue are (i) introduction of VAT in 2005, and (ii) rise in the international price of crude oil. With the slide in the price of crude oil, there has been a resultant adverse impact which is reflected in the reduction of states own tax estimates for (BE) being slightly less than (RE) 2. Non-tax revenue also reached its highest level, at nearly Rs Crores in The devolution as share of central taxes has been increasing steadily over the years. But this trend is estimated to be reversed from the lower budget estimates for (Table 1). The slowdown of general economy is one of the reasons for this. 4. Grants-in-aid from the Centre is scheduled to reach the highest level, at a little over Rs Crores, in as per B.E. (Table 1) 5. The Revenue expenditure has shown a consistent upward trend. This is expected to go up sharply due to the impending pay revision. 6. Summing up, it is observed that the revenues of the State are dependent on petroleum crude oil prices to a great extent, by way of oil royalty and sales tax on

19 petroleum products. Although crude oil prices have risen in the international market lately, this source of revenue would at best be a volatile one. The impact of likely introduction of Goods and Services Tax, which would replace VAT, on the State Tax revenues, remains to be seen. Neither the base nor the rate of growth of State Tax and Non-tax revenues together are growing at a rate which can give any comfort in the context of the impending pay revision. 7. Based on the aforesaid observations, the Commission has suggested specific points for action to mitigate the increased burden on account of pay revision in the chapter on Financial Implications. Revenue Receipt It is observed from the following table that the share of State s Own Taxes has declined from 28.48% of Revenue Receipts in to 17.47% in (B.E.) As per Budget estimates for the year , the Non-Plan Grants have been estimated at Rs Crores as against Rs Crores in Grants for Centrally Sponsored Schemes have been estimated to increase to Rs Crores as compared to Rs Crores in These two are the main components of higher estimates of Grants-in Aid compared to the earlier years. Table 1 Year State Tax Non-Tax Share of Central Tax (28.48%) (10.20%) (26.71%) (26.66%) (12.18%) (27.84%) (27.30%) (10.77%) (26.00%) (26.83%) (12.11%) (25.38%) (25.49%) (13.60%) (28.53%) (21.92%) (13.93%) (32.09%) (R.E) (17.32%) (9.64%) (24.85%) (BE) (17.47%) (8.86%) (24.05%) (in Rs. Crore) Grants in Aid (34.61%) (33.32%) (35.93%) (35.68%) (32.38%) (32.06%) (48.19%) (49.62%) Total Revenue (100%) (100%) (100%) (100%) (100%) (100%) (100%) (100%)

20 Figures in brackets indicate percentage over total Revenue. Source: Assam Budget in Brief, & Economic Survey Revenue Expenditure It is observed from the Table-2 that Revenue Expenditure has increased from Rs Crores in to Rs Cr. During the period from to , around 50% of total Revenue Expenditure occurred under the component of Salary, Wages and Pension. Cr) Table 2 (in Rs. Components Interest (13.73%) (14.33%) (13.23%) (11.86%) Salary & Wages (39.36%) (41.20%) (41.88%) (41.79%) Pension (10.38%) (9.60%) (10.28%) (10.52%) Others (36.53%) (34.87%) (34.61%) (35.83%) Total Source: Annual Administrative Report, Finance Department Non Plan revenue receipts Table-3 given below indicates that generally non plan revenue receipts from various sources have grown over the years. The Non-Plan Grants have however shown a varying trend. States Own Tax revenues decreased in compared to the

21 previous years due to litigations on Entry Tax and reduction of rates of CST. Year Own Tax Revenue Non-Tax Revenue Table -3 Share of Central Taxes Non- Plan Grants under FC (Rs in Crore) Other Total Non Non Plan Plan Revenues Grants Source: Economic Affairs, Finance Department. Non Plan Revenue Expenditure It is seen from the following table that share of salary, wages and pension in the total Non Plan Revenue expenditure has grown over the years and is bound to increase further with impending pay revision. Table 4 (in Rs. Cr) Components Interest Salary & Wages Pension Others Total Receipt and Expenditure from the Consolidated Fund Source: Economic Affairs, Finance Department The following table-5 shows the Receipt and Expenditure from the Consolidated Fund of Assam. The capital expenditure in the year became lower compared to previous years due to reduction in loan liabilities. Now the total expenditure from the Revenue Account has been estimated at Rs Crores in Budget estimates for on account of additional burden of pay revision. The expenditure under Consolidated fund on both Revenue Account and Capital Account during has been estimated at Rs Crores as against the receipt of Rs Crores under the same

22 account showing a cash deficit of Rs Crores. Table 5 (Rs. in Crore) Year Receipt Expenditure Surplus (+) Revenue Account Capital Account Total Revenue Account Capital Account Total Deficit (-) (Actual) Actual) Actual) (R.E.) (B.E) Source: Assam Budget in Brief , Economic Survey Expenditure on Salaries, Wages and Pension Table -6 indicates that expenditure on Salaries, Wages and Pension has increased three times during the period of to Expenditure on Salaries, Wages and Pension accounted for about two thirds of total revenue expenditure during the last few years. Year Expenditure on Salaries, Wages and Pension Total Revenue Expenditure Table-6 % of Total Revenue Expenditure (Rs. in Crore ) Total Expenditure [including on Capital Account] % of Total

23 Revenue Expenditure under different Revenue Heads The following table reveals that General Services (42.23%) constitute the highest proportion of total revenue expenditure of the State as per budgetary estimates for the year Year General Services (43.76%) (41.77%) (36.06%) (37.55%) (R.E) (35.36%) (B.E) (33.75%) (B.E.) (42.23%) Social & Community Services (40.75%) (39.78%) (41.67%) (39.08%) (44.30%) (38.44%) (32.53%) Table 7 Economic Services (15.39%) (18.31%) (22.14%) (23.30%) (19.55%) (19.11%) (16.02%) Grants-in-aid & contribution 7.54 (0.11%) (0.15%) (0.13%) 7.80 (0.07%) (0.80%) (8.70%) (9.22%) (Rs. in Crore) Total Expenditure Source: Assam Budget in brief: Economic and Statistics Department (100%) (100%) (100%) (100%) (100%) (100%) (100%) Chapter 2 Principles of Pay Determination Background 2.1 Broadly speaking, there are four principles of pay determination, viz., 1) Equal pay for equal work, 2) Fair comparison, 3) The principle of demand and supply or market value and 4) The principle of model employer.

24 After detailed examination of the principles as mentioned above, the 1973 Assam Pay Commission observed- Our own view is that, in the present context of planned economic development, inflationary situation, high incidence of unemployment and the general problem of poverty of the masses, it would be improper for the State to pay unduly high salaries to its own employees. There is today, a vicious circle of competition in attracting personnel with unduly high salaries. The Government with its responsibility to the public has a duty to break the vicious circle. It cannot do this duty better than by enforcing moderation in salaries in respect of its own employees.thus, it will be seen that it is difficult to apply, in toto, any single principle. We have to take into consideration the various factors in the determination of pay structure, including per capita income, financial position and general condition of the economy as discussed above. Our recommendations in regard to pay structure have, therefore, been formulated taking into account all the various relevant factors. The subsequent Pay Commissions, from 1979 to 1994 also took stock of the various principles of pay determination, broadly on the lines mentioned above. Two relevant points as suggested by 1988 Pay Commission, which are deemed to be significant and useful in this connection, are as follows: a. The procedure of recruitment. b. The nature of the job, its complexity and the stresses and strains, the employee has to undergo in discharge of duties. Present scenario 2.2 In addition to the general principles of determination of pay and other benefits discussed above, the Commission took note of certain circumstances in the background of which this Commission has been constituted and is functioning. One such major circumstance is the revision of the pay structure of the Central Government employees pursuant to the recommendations of the 6 th Central Pay Commission. The main demand of all the associations of employees which appeared before the Commission essentially was for parity with Central Government pay scales and benefits. A few

25 associations went to the extent of stating that their only demand was parity with central pay scales. The Chief Minister has announced that it has been decided to adopt Central Government pay scales for State Government employees. The Commission had to take into account all these factors before arriving at a suitable pay structure. 2.3 It must be borne in mind that any attempt to import pay scales of one type of organisation into another organisation when the functions of the two are different in many respects is fraught with difficulties. There are many functions which are incumbent on the Government of the country which are totally absent in the case of State Governments e.g. defence, foreign affairs etc. Even where functional organizations with the same nomenclature exist in Central Government and State Government as for instance Agriculture, Industry etc., the actual functions of the respective ministries in Government of India and of the departments of the State Government are very much different. Therefore, efforts to give central scales to the State Government employees pose many problems even to the extent of making it virtually impossible to bring about post to post equivalence. 2.4 Even in respect of posts where the nomenclature and general nature of duties and functions appear to be similar, it is observed that there are differences in the situation and differences in the pay scales can be both ways. Surprising as it may seem, the maxima of pay scales in respect of ministerial officers in the State Secretariat were higher than in the Central Secretariat (pre revised scales).the same is true in case of maxima of the scales of the Class IV employees of the State Government and those of the Group D employees in the Central Government. On the other hand, there are numerous posts in the State Government which have lower scales of pay compared to equivalent or similar posts in the Government of India. It has also been brought to the Commissions notice that pay scales of many posts in Assam are comparatively lower than the pay scales of similar posts in varying degrees in many other states of the country. 2.5 Apart from considerations relating to Central pay scales, the Commission has been guided by a factor common to all such bodies i.e. all employees should

26 get a decent living wage. This factor is more important for the employees at the lower end of the spectrum. The table at Annex indicates the minimum living wage as on as per the 15 th International Labour Conference. It is clear from the table that basic pay above the Living Wage for the Class IV employees would constitute a decent wage. 2.6 However, in respect of employees at the cutting edge, and as one moves up the ladder, particularly in case of executive officers of the State Government who have to interact frequently with employees of the various ministries, organizations and other arms of the Government of India and with public sector bodies such as nationalized banks etc., the necessity of according the requisite status to such officers and employees has to be borne in mind. As it is important to attract the best talent available in the job market, there is a strong case for giving better salaries at the higher levels. 2.7 The Commission devoted considerable time to discuss various issues mentioned above. The manner in which the pay scales of the State Government employees are to be revised, in consonance with the demand of the employees and various public announcements, and the context of the aforesaid factors, has been deliberated over at length by the Commission. 2.8 After considerable deliberations, it has been found that there is no precise formula for revision of pay scales of the State Government employees to bring them exactly on par with those in the Central Government. 2.9 In view of all the aforesaid relevant factors, the Commission has endeavoured to devise a suitable pay structure for the State Government employees, keeping in mind, the pay structure adopted by Government of India, the basic principles of fiscal prudence and the ability of the State Government to bear the expenditure.

27 General Recommendations on the Pay Structure Chapter 2.1 Running pay bands and grade pay Increments The Commission is recommending introduction of running pay bands for all posts. Five distinct running pay bands are being recommended; one running pay band each for all categories of posts in existing Classes II to IV and two pay bands for Class I posts. The Commission has also recommended introduction of grade pay in line with Government of India. Grade pay is indicative of relative seniority in a particular department. Grade pay will determine the status of a post with a senior post being given higher grade pay. At the time of promotion from one post to another in the same running pay band, the grade pay attached to posts at different levels within the same running pay band will change. Grade pay being progressively higher for successive higher posts, the employees on promotion will get monetary benefit on promotion in the form of the increased grade pay. In case of promotions from one pay band to the next pay band, the revised pay in the pay band will, in no case, be less than the minimum of the higher pay band. Basic pay shall consist of pay in the Pay Band and Grade Pay. It shall be inclusive of ad hoc fitment benefit, if any, as per provision in 2.1.8(iv). The Commission has also recommended Terminal Pay for specific posts. Terminal Pay is a pay recommended in respect of posts which shall not be filled up once the post falls vacant All the running pay bands will have annual increments as a percentage of the total of pay in the pay band and the corresponding grade pay. In the new pay structure, the total of pay in the pay band and

28 Benefits of running pay bands corresponding grade pay would constitute basic pay. All employees will be entitled to a normal increment of 1% annually. Over and above that, employees will be eligible for a variable increment. The Commission has recommended introduction of a new system of Increment Based On Performance (IBOP) in which employees can earn an annual increment which may go up to 2% in addition to the normal increment of 1% based on performance. The details of IBOP are given in a separate chapter. Thus a completely new scheme has been recommended where annual increments are payable on percentage basis instead of a fixed amount. In the revised scheme, the date of annual increments, in all cases, will be the 1 st of July. Employees completing six months and above in the grade as on July 1 will be eligible. This is being recommended to address a large number of anomalies that arise due to the present system of annual increments where the increments are given on the basis of the month of joining a particular post and which frequently leads to a senior drawing less salary than his/her junior. This will also give ample time for all inputs to be considered while deciding the question of payment of IBOP to individual employee Introduction of running pay bands will have the following benefits: (i) (ii) Since all the pay bands have a long span, the problem of stagnation in a pay scale will be effectively addressed. All matters concerning pay fixation at the time of promotion etc., which lead to numerous anomalies will be addressed automatically (since only grade pay will change at the time of promotion without any refixation of salary in the higher grade except when the promotion is from one running pay band to another). (iii) Most of the pay scale related anomalies that have been continuing would be resolved. (iv) The model will make the Government organization less hierarchical. While, initially grade pay will be payable as per the hierarchy, Government will have the flexibility to remove layers by removing specific grade pay. In the long run the model can be suitably adjusted to remove even the element of grade pay thereby