Multiplication Factor expected to play a crucial role in calculating new revised basic pay for Central Government employees in 7th Central Pay Commission.”
With 16 months having passed since constituting the 7th Central Pay Commission, speculations are running wild among Central Government employees as to the changes that await them. Multiplication factor is one of the main reasons for the intense guesswork.
A middle-aged employee of the Central Government is likely to get an increment of Rs. 500 to 600 once every six months, due to increase of additional Dearness Allowance. In the current scenario, the amount is barely enough to meet unexpected auto-rickshaw expenses for a trip or two to work. But, it is not
the DA that the employees are eagerly waiting for.
The total percentage of Dearness Allowance plays a very important role in calculating the New Basic Pay as per the 7th Pay Commission. The revised basic pay is expected to come into effect from January 1, 2016.
Dearness Allowance, which is currently at 113%, is expected to rise by two additional installments (01.07.2015 and 01.01.2016), let’s assume that these will add up to 10%. Then the total increase could become 123% by January 1, 2016.
Multiplication Fitment Formula is going to be based on the Dearness Allowance percentage on 01.01.2016.
The 6th Pay Commission recommended that the Multiplication Factor be fixed at 1.74 in its report and also recommended that the 40% from the maximum Pay Band of pre revised scale took an average and granted it as Grade Pay.
When CG Employees Federations pointed out the flaw in the calculation of the Multiplication Factor, it was increased to 1.86 by Central Government.
If the same method is applied to calculate the Multiplication Factor now, it could be as high as 2.23. In other words, let us assume the Basic Pay, as of 01.01.2016, as 100%. If you add Basic Pay and Dearness Allowance, 100% + 123% = 223%. This number is being taken for calculations as 2.23.
If the Dearness Allowance for the two additional installments adds up to more or less than the expected 10%, it would affect the Multiplication Factor number. This is the reason giving more importance for Dearness Allowance.
Let’s understand the importance of multiplication factor in pay fixation with an example.
At the time of 6th CPC pay fixation, the last drawn basic pay under 5th CPC was multiplied by 1.86 and rounded off. The 6th CPC was also recommended that a new entity named Grade Pay was created and a sum total of this was the new Basic Pay.
Pay fixation for a basic pay of Rs.3500(S5 :3050-75-3950-80-4590)
Basic Pay x Multiplication factor(3500 x 1.86) : 6510
Homeland Security and Governmental Affairs Committee Ranking Member Tom Carper (D-Del.) and Committee Members Claire McCaskill (D-Mo.), Jon Tester (D-Mont.) and Heidi Heitkamp (D-N.D.) hosted a roundtable to examine, analyze, and discuss the various challenges facing the Postal Service in rural communities across the country.
Members heard from representatives from the National Rural Letter Carriers’ Association, National Association of Postmasters of the United States, Postal Regulatory Commission, and the National Newspaper Association.
Sen. Carper:“Our Constitution requires that the Postal Service deliver mail to the last mile. This means that no matter how rural or remote the address, Americans will get their mail. However, as the Postal Service has made changes to service to address its financial condition, service to rural communities in particular has suffered. While delivery to our most rural communities certainly presents unique challenges, it also presents an important competitive advantage and opportunity that can help the Postal Service thrive. I hope today’s discussion provided members a chance to better understand rural postal issues and help begin the process of addressing these challenges in the context of comprehensive postal reform this Congress. We must help the Postal Service move in a more thoughtful direction, better leverage its 200-year old distribution network, and understand new ways we can help it maintain service without putting rural communities at a disadvantage.”
Sen. McCaskill:“Rural post offices are part of the identity of rural America. The obligation for the Postal Service to provide universal service to the American people doesn’t just apply to Americans in big cities and urban centers—it applies everywhere.”
Sen. Tester:“By reducing services, making product deliveries less timely, and increasing the burdens on customers, it’s difficult to see a good path forward for the Postal Service. But Congress can ensure that the Postal Service becomes financially solvent by making a few basic policy changes so the USPS can remain an important part of rural communities into the future.”
Sen. Heitkamp:“In North Dakota and other rural areas across the country, farmers and hardworking families may live 20, 30, or even 40 miles from the nearest town. But where they live shouldn’t prohibit them from getting their mail in a timely manner. Getting our mail in a timely manner enables small businesses to ship their products, helps families and seniors get needed prescriptions, and allows individuals to access services beyond their communities. And these needs are amplified in rural communities that are disproportionately impacted by poor mail delivery. To make sure rural America doesn’t get left behind, we need to pass comprehensive legislation that makes needed reforms to the Postal Service and truly works for rural communities in North Dakota and across the country.”
In the Union Budget, 2015, an increase in the rate of Service Tax from 12% to 14% had been proposed from a date to be notified.
The Finance Bill, 2015 has since been enacted and the Central Government has notified 1st June, 2015 as the date from which the rate of 14% would become applicable. The provisions levying Education Cess and Secondary and Higher Education Cess would also cease to have effect from same date i.e. 1st June, 2015, as the same would be subsumed in the service tax rate of 14%. Certain other changes have also been notified with effect from 1st June, 2015.
However, the date of giving effect to the provisions relating to imposition of a Swachh Bharat cess on all or any taxable service will be done in due course.