Saturday, September 08, 2012

The Arrears Calculation Frenzy

Following posts on some blogs and media web-sites about the judgement on the Armed Forces Officers' "Rank Pay" case, enthusiasts and optimists chose to flood the web with estimates, queries, opinions and views on what the arrears would be. There have been numerous chats and discussions on the manner of calculation of arrears and the likelihood of further action on obtaining an enhancement of the interest-component ordered by the Hon'ble Supreme Court.

It has to be said, the matter has generated so much of interest and attention amongst the armed forces officers, serving and retired, that it's difficult to think of another instance in living memory of such a sense of collective involvement. After-all, matters such as OROP or NFFU are still in the "Pie In The Sky" class. One may see these hopes and aspirations being realized, or one may not. But the IV CPC rank pay issue strikes a slightly different emotional chord. It represents, directly, a sense of having been wronged, of a fair entitlement having been denied. Matters were not  helped by the not exactly benign and friendly stance represented in the legal contest mounted against the delivery of this entitlement.

Now, at the time of this blog post, it's not known what the judgement exactly says. It's also not known what the response will be from the administrative machinery engaged with the matter. From the gist of the matter, as brought out in the media and on blog posts, it would appear the judgement requires that the pay of all affected officers be refixed wef 01 Jan 86 and the arrears paid, with interest at 6% accruing from 01 Jan 2006.

Understandably, as long as the matter was sub-judice, the individuals and associations would have been reticent in respect of the intricacies of representations made during the litigation process. The net result is it is anybody's guess as to by how much were officers denied their dues through the 'incorrect' deduction of rank pay at the time of pay fixation post implementation of IV CPC. One excel spreadsheet in circulation, representing a train of extremely 'positive thinking', uses the amount of the entire rank pay of the time as arrears, with the resulting sum sufficient to upgrade one's car with ease. Another "brief", purportedly issued by one of the services headquarters, cites examples of the calculations involved and appears to offer, at first glance, a more realistic appraisal of the matter.

Summarising a few basics may not exactly be a bad idea before succumbing to the spreadsheet urge. Basically, the issue requires clarity in respect of the following: 
  • It was not the 'Rank Pay' that was denied wef 01 Jan 86, but an amount equal to the rank pay was deducted from the calculation for arriving at the 'refixed' pay wef 01 Jan 86. That does not mean the arrears for the month of January 1986, resulting from the incorrect calculation were equal to the rank pay. 
  • Essentially, the issue is how the total unrevised emoluments were calculated for January 1986 and how the revised emoluments were then used to "fix" the basic in the revised pay scale. Because of the rounding off involved, the difference between the revised basic pay as fixed and the revised basic pay as it should have been calculated, was considerably less, in most cases, than the rank pay amount itself. So, calculating arrears based on the rank pay amount may not exactly be the most rational solution. The new SUV may have to wait awhile.
  •  IV CPC : The following formula was used for calculating the basis for refixing the pay: 
    • Unrevised Basic Pay for January 1986+DA+Interim Relief+20% of Unrevised Basic Pay for January 1986. Though the Rank Pay granted wef January 1986 was to be added to this, it wasn't and hence the litigation.
    •  The amount obtained, without including the rank pay, was used to refix the revised basic by rounding off to the nearest figure for the rank in the new payscale of  Rs 2300-100-3900-150-4200-EB-150-5100. This refixed pay was less than what it should have been if Rank Pay had been included in the calculation, but not by an amount equal to the rank pay.
    • It is only a guestimate, and ought to be treated as such, but that afore-mentioned "brief", purportedly from one of the services HQs, does offer an insight into how the calculation ought to have taken place. The "brief" says the calculation should have been Unrevised Basic Pay for January 1986+DA+Interim Relief+20% of Unrevised Basic Pay for January 1986+Rank Pay For January 1986.
    • There has been a hum, and the jury is still out on that one, as to why the calculation should not have been  Unrevised Basic Pay for January 1986+DA+Interim Relief+20% of the sum of Unrevised Basic Pay for January 1986 and Rank Pay For January 1986+Rank Pay For January 1986.
    • Now, what the precise submission has been by the litigants and how exactly the Hon'ble Supreme Court has ruled is anybody's guess at the present juncture. But if one of the above-mentioned ways of calculation does fit the bill, then the next question is, does the sum arrived at form the basis for directly fixing the revised pay in the scale by rounding off to the next stage OR does one first subtract the rank pay from the sum and then fix the amount arrived by rounding off as revised pay in the scale. That aforementioned "brief" would appear to suggest the latter course, even though it does not propose inclusion of rank pay along with the basic pay in the 20% part of the equation.
    •  So, we are presented with a number of possible solutions right at the stage of IV CPC: Calculation with Rank Pay in 20% portion or without. Fixation with removal of rank pay from sum arrived at or without.  
  • V CPC : After we arrive at a solution, we need to deal with the pay fixation for V CPC. Now, in this case the pay fixation was done with this formula Unrevised Basic Pay for January 1996+DA+Interim Relief+40% of Unrevised Basic Pay for January 1996+Unrevised Rank Pay For January 1996. It is quite possible revised rank pay for January 1996 should have been added and NOT the unrevised one. From the sum arrived at, the revised rank pay of January 1996 was subtracted, and the resulting figure was fitted in the appropriate scale by rounding off. This leads to the following alternatives for calculating the revised pay in line with the judgement : 
    • Unrevised Basic Pay for January 1996+DA+Interim Relief+40% of sum of Unrevised Basic Pay and Unrevised Rank Pay for January 1996+Unrevised Rank Pay For January 1996. 
    • Unrevised Basic Pay for January 1996+DA+Interim Relief+40% of sum of Unrevised Basic Pay and Revised Rank Pay for January 1996+Revised Rank Pay For January 1996.
The foregoing is based on guesswork. Details being known only to the direct litigants, the purpose of this blog post is not to state "what is what" but point to the difficulty of establishing "what is what". It would, therefore, be foolhardy, to hazard a guess as to the likely volume of the anticipated inflow of funds. If not a trickle, it may not be the flood some may be thinking about. It may be best to wait for clarifications from RDOA and for the issue of formal orders by the adminstrative machinery.

The essence of the matter is that fairness has prevailed, the diligence of the litigants has borne fruit and the collective stand has been vindicated.










5 comments:

  1. do you have an email id? Would like to mail you the addl affidavit that UoI filed so that you know how it calculated and justified what was paid.

    My email id is sharad10525@gmail.com

    ReplyDelete
  2. @Aerial View: Do upload it here, or to your Google Documents account and provide a link in a comment on this post so that all can access it and view it. Thanks.

    ReplyDelete
  3. Agreed.

    But how about fixing of rank pay in Vth CPC. Capt's rank pay in 5th CPC was fixed for Rs 400/- whereas at the fag end of IVth CPC and before payment of arrears of Vth CPC a Captain was getting Rank pay of Rs 200/- plus DA @ 170% making total rank pay Rs 540/-, from 01 Jan 1996 Captain started getting rank pay of Rs 400/- & without DA whereas it should have been fixed @ Rs 600/- a month. If Captain's basic pay in Vth CPC is fixed at three folds of the rank pay of IVth CPC then the rank pay of all other ranks up to Brig should have been fixed @ three-folds of IVth CPC rank pay which was not done. This aspect is not being pointed out by any one. The aim and purpose of successive pay commissions is to increase and rant of step up pay and not to decrease the pay drawn in previous CPC.

    Col Raju (Retd)

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  4. @Lt Col (Retd) MS Raju: After we have come to some sort of an understanding how exactly the pay fixation for IV CPC will work out, we should be able to approach the V CPC fixation.

    There too it'll need to be established which rank was required to be equal to which civilian post, pre and post V CPC.

    The formula for calculating the revised basic would have to be looked at. They'd added the old IV CPC rank pay and then subtracted the higher, V CPC rank pay for basic fixation.

    The question will arise if we should add the V CPC rank pay instead of the old, IV CPC rank pay and then not subtract anything for fixing the new post V CPC basic in the scale?

    For every alternative method of calculation of the basic for IV CPC, we'll have to consider the arrears for V CPC with all the alternative calculations available in respect of V CPC itself.

    Makes one think of the exercises on Permutations and Combinations one used to enjoy solving in one's Higher Secondary days.

    So, let us finalise how things will work out for the IV CPC arrears first.

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  5. My complements for your approach.yeah!WHAT MATTERS IS THE SUPREME COURT JUDGEMENT/ORDER.Its effect on those special A/N/AF instructions of 1987.Those untenable/illegitimate insertions would stand to be modified,or those insertions become NULL &VOID.This is begining to initiate the matters and issues to derive all those that were denied.SUNLIT has fair under standing of those aspects and issues. few of these-
    1.Integrated pay is proportional to length of svc,and rk pays are separate f Capt to Brig. this is RULE and PRINCIPLE of 4cpc.NO VIOLATION OF THIS?????.
    2.Sel gr of Maj & Lt Col were abolished from 1986 even though the processes started from 1980.Since then these are substantive rks by time only.Thus all those insertions /differentiations of sel & ts stand null & void.
    3. Lt Col by time scale is a substantive promotion to higher rk- it is not demotion-not hony-not local- not acting....etc.This is achived/promoted after 21/24/25/ 26 yrs when their seniority offrs were promoted much earlier at about 16 yrs.relevance of NFFU,present equation of Col sel of say 16 yrs Col ts of 26 yrs...etc.Also abolition 2/Lt rk and rev of lowest comd rk to Col is also of relevance '
    4. All these have been overlooked/disregarded/neglected/denied by a sec of sel gr lot who man and head the Hqs.

    5. Therefore legitimate has to be derived.PURSUIT.
    THIS IS FOOD /FODDER FOR THE AFFECTED OFFICERS.CONTINUE TO INTERACT AND PARTICIPATE.RDOA,ALONE CONT DO EVERYTHING.

    2.

    ReplyDelete