Pay Fixation on 1.1.06 and on the date of increment – A comparison

We have been receiving lot of queries on sixth pay commission new pay fixation from the GConnect users. The point of concern of all is whether we will get any monitory benefit in the form of arrears or in the form of fixation of higher pay as on Sept 2008 (even at the cost of loosing some of arrears benefits), if the Pay Fixation to be done on 1.1.2006 is deferred to date of old increment that falls during the year 2006. This scenario squarely applies to Employees who have got financial upgradation under ACP scheme between 1st Jan 2006 and 31st Aug 2008.

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As per Rule 5 of CCS (Revised Pay) Rules 2008, an employee may elect to continue to draw pay in the existing scale until the date on which he earns his next or any subsequent increment in the existing scale or until he vacates his post or ceases to draw pay in that scale.

As far as the method of new pay fixation is concerned, Rule 11 of CCS (Revised Pay) Rules 2008, provides that where a Government Employee continues to draw his pay in the existing scale and is brought over to the revised pay structure from a date later than 1st Jan 2006, his pay in the revised pay scale shall be fixed as follows.

New Pay in the Pay Band is fixed by adding Basic Pay applicable on the later date (viz., the date on which the employee opts for new pay fixation), and Dearness Pay and Dearness Allowance applicable based on the rates applicable as on 1.1.2006. In addition, Grade pay corresponding to pre- revised will be payable from the date of New Pay fixation.

Now, let us have a comparison between the New Pay fixation on 1.1.2006 and on the date of increment.

Based on this rule frame work, We have made illustrative New Pay Fixation for 12 employees who belong to different pre-revised scales and receive pre-revised increments in different months.

This study shows that employees who receive their pre-revised increment in the month of June and before get no benefit either in the arrears or in the new pay when new pay fixation is deferred to their respective increment month. However, when the increment month is after Junel i.e from July to Dec, those employees if they defer their pay fixation to the month of their respective increment month, get small benefit in their Gross pay as on Sept-2008 (to the tune of around 7% to 10% of their pre-revised pay as on 1.1.2006), after incurring some loss in the arrears receivable.

This is because when an employee misses the revised increment during July 2006 on account of deferred fixation, he loses 3% of revised pay which is at any point of time more than the pre-revised increment the employee gets when he continues to get old pay after 1.1.2006. This is why the new Pay Fixation from Feb-06 to June-06 based on Pre-revised Basic Pay, Dearness Pay and Dearness allowance (DA) in these months is lesser than the New Pay fixed on 1.1.2006. On the other hand, when the New Pay is fixed during July-2006 to Dec-2006, the additional Dearness allowance (DA) of 5% from July 2006 added in the pre-revised pay which is taken for calculating the New Pay fixation neutralizes the July increment amount of 3% lost by the employee due to deferred Pay Fixation.

Of course the inference made out of this study is not foolproof and may vary in certain situations. We invite discussions on such situations by the users in the form of comments to this article.

The option available for the employees who have been promoted or received their ACP after 1.1.2006 is slightly different as they could opt for New Pay Fixation on the date ACP/Promotion. Want to have an idea about fixation of new pay in the case of ACP / Promotion? Check this article in Gconnect