by

Pannvalan 

Now, more than 7 months have elapsed since the expiry of the previous wage settlement on 31-10-2012.  There is a tardy progress in the talks held so far and both the sides are yet to touch the main issues –

         (a)   Base Date for merger of Dearness Allowance with the existing Basic Pay

         (b)   Additional Load to be considered, after merging the present Basic with a portion of the D.A.

         (c)   Construction of Revised Pay Scales

We will discuss about all these, one by one.

Base Date for merger of Dearness Allowance with the existing Basic Pay

If the past is any indication, the Base Date will be 30-09-2011, since 30-09-2006 was taken as the basis for the last settlement that became effective from 01-11-2007.  During the course of the talks held today (07-06-2013), the IBA has proposed to fix this date as 31-12-2009 (actually, no specific date was mentioned by IBA, but they have offered to take the year 2009 as the basis).

Subsequently, IBA may agree to advance this cut off date to 30-09-2010 or even 31-03-2011. On these dates, the D.A. was at 46.20%  and 52.80% respectively.  Therefore, after merger of the D.A. at this level, the revised Basic Pay will be 1.462 times or 1.528 times the present scale.  Remember, this is without any additional load.

Additional Load to be considered

Going by the expectations and the present mood of the ordinary members, we can very well say, anything below 20% will not be acceptable and hence may be rejected outright by a majority of them.  If the Trade Union leaders settle for anything less, they face the prospect of being overthrown by their own fraternity.  Hope, they are aware of this danger.

Already there is a wide disparity between central government employees and us, after the implementation of 6^th Pay Commission recommendations.  From 01-01-2016, the 7^th Pay Commission recommendations may be a reality, to the extent they are accepted by the Union government.  In all likelihood, whether bankers’ wages are revised or not, before the next Parliamentary elections in May, 2014, the 7^th Pay Commission may be constituted.   In a way, that will fuel bankers’ movement further and make their stand firmer and stronger.

Against this backdrop, if the bank unions have any sense, they must not settle for anything less than 25% as the additional load, even if it means a climb down from their original demand for a hike of 40%.

Construction of Revised Pay Scales

Now, factoring in these points, the revised basic pay may be 125% of 1.4620 or 1.528, as discussed above.  Thus, the revised basic pay will translate to 1.8275 to 1.91% of the present basic pay.  This is the worst possible scenario.

Suppose the cut off date for merger of D.A. is taken as 30-09-2011 as was done last time, the revised basic pay before additional load will be 1.6015 times the present basic.  Then adding another 25%, the revised basic will be 2.001875 times the present basic pay.  At this level, the settlement appears to be somewhat good.

Suppose the cut off date for merger of D.A. is taken as 31-03-2012 and the additional increase foreseen is 30%, then the revised basic pay after merger of D.A. will be 1.6420 times the present pay and after the additional load of 30%, the revised basic pay will be 2.1346 times the existing basic pay.  This is a good settlement.

Suppose the cut off date for merger of D.A. is taken as 30-09-2012.  As the D.A. was 76.50% on 30-09-2012, the revised basic pay will be 1.7650 without any additional load.  With the additional load of 25%, the revised basic pay will be 2.20625 times the existing basic pay.  If this can be secured, it will be considered as a very decent wage hike.  But this possibility is very unlikely, inasmuch as the lackadaisical attitude of the unions and the weakness of the leaders in effective bargaining.

My Suggestions to the Members

I had presented 36 different scenarios in one of my articles on the 10^th Bipartite Settlement.  I request the members to go through them carefully.

Then, please tell me what your revised basic pay to be –

Is it 2.00 times or 2.25 times or 2.50 times or 2.75 times the present basic?  Or even more?

I am very eager to know the responses of our members.

10th BPS - Approach Paper - Strategies and Implications; Different Scenarios of Likely Pay Scales at different Level of Mergers and Different %age of Hikes

Click Here to Download the EXCEL File giving different scenarios of pay scales at different levels for officers

Date: 07-06-2013                                                                                                                      

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Note: I am giving maximum thrust to increase in Basic Pay, for the reasons already explained by in my Approach Paper published last year.