Dissecting The V CPC Pay Fixation Formula

{Edit: 16Apr2017: It is gratifying to know this blog-post continues to draw views and interest almost five years after it was published. There may well be as yet unresolved issues regarding the Rank Pay matter. However for the Officer cadre, as well as veteran Officers, there is that other totally unresolved issue of the selection of date of implementation of phase-I recommendations of AV Singh Committee. Just like the rank pay matter, that issue affects all Officers who were serving and also those who had retired by the time the recommendations were implemented. For some time now, I have permanently linked that issue to the right of the blog page as a "Featured Post". All pre 2004 commissioned Officers still in service and veterans could consider going through the matter that affects them all. Here is another link that can be clicked on to view all connected posts}

With the recent distraction caused by news on the COS Report regarding pension anomalies, the spotlight has shifted somewhat from the crunch issue of arriving at a reasonable understanding of implications of the "Rank Pay" case judgement.

It's heartening to note that even the agencies responsible for implementing the judgement have begun to issue some notices on the matter on their web-sites. Some of the lingering doubts regarding the applicability of the judgement post V and VI CPCs are being gradually dispelled as the afore-mentioned notices mention calculations post V and VI CPCs.

Making a reasonable assumption on the manner of the initial fixation of basic at IV CPC, it should be possible to arrive at a, again, reasonable estimate of what the basic pension pay would have been as on 31 Dec 95. Here the result of the efforts of the countless spread-sheet warriors, who had descended on the scene, could prove useful.

The real issues here too would be:

*The viability of the formula used by V CPC for working out the emoluments.

*The manner of addition of Rank Pay to the emoluments.

*The fixation of the worked out revised basic in the appropriate pay-scale corresponding to each rank.
To recall, V CPC had used the following formula for adding up the unrevised emoluments relating to Jan 96: 

1.4[{Un-Revised Basic+Stagnation Pay}+Un_Revised Rank Pay]+DA+IR-New Rank Pay 

The following points cloud the issue somewhat:

*It's not clear why the IV CPC Rank Pay was added to the sum and not the revised, and higher V CPC Rank Pay.

*Why, after adding the lower amount of the unrevised rank pay, the higher amount of the revised rank pay was subtracted from the aforementioned calculated amount for fixing the new revised basic in the appropriate pay-scale.

If the logic of adding rank pay for calculating to the emoluments, as understood from the judgement, is to be followed, the formula ought to have been as follows:



1.4[{Un_Revised Basic+Stagnation Pay}+Revised Rank Pay]+DA+IR

A third alternative could have been to add the unrevised rank pay but not subtract the new revised rank pay, as follows:

     1.4[{Un_Revised Basic+Stagnation Pay}+Un_Revised Rank Pay]+DA+IR 

{Edit}: A fourth alternative would be to retain the old rank-pay in the 40% component but to add the new rank pay for fixation. Let's not forget, at IV CPC the rank-pay which was then "new" was to be added (but wasn't) to the emoluments. At that time the "old" rank-pay was nil and did not figure in the calculation in the 20% component of the IV CPC formula. So we get the fourth alternative as follows:

1.4{Un_Revised Basic+Stagnation Pay}+0.4{Un_Revised Rank Pay}+DA+IR+Revised Rank Pay

Now giving specific examples, or making actual calculations, would be foolhardy in the extreme. We need to get some sort of an indication which one of these alternatives would be most rational in light of the actual arguments that took place during the litigation.

Only through a process of exchange of views and ideas can one hope to arrive at a rational solution to the V CPC stage of the puzzle.

A trial calculation yields the following alternatives for the minimum basic pay of each rank:



Rank	Unrevised  Starting Basic Pay For Rank In IV CPC  Scale	IV CPC Rank Pay	DA	IR I	IR II	V CPC Rank Pay	V CPC Formula Alt 1	Alt Formula 2	Alt Formula 3	Alt Formula 4	Starting Pay In Rev Pay Scale	Next Applicable Increment
I	II	III	IV	V	VI	VII	VIII	IX	X	XI	XII	XIII
							1.4(II+ III) + IV+ V+ VI-VII	1.4(II+ VII) + IV+ V+VI	1.4(II+ III) + IV+V+ VI	1.4(II)+ 0.4( III) + IV+V+ VI +VII
Capt	2900	200	4588	100	310	400	8938	9618	9338	9538	9600	300
Maj	3400	600	5180	100	400	1200	10080	12120	11280	11880	11600	325
Lt Col	3900	800	5217	100	470	1600	10767	13487	12367	13167	13500	400
Col	4500	1000	6105	100	550	2000	12455	15855	14455	15455	15100	450
Brig	4950	1200	6660	100	615	2400	13585	17665	15985	17185	16700	450

IV CPC Pay Fixation: The "Additional-Increments Vs Scale-Change" Debate

In the absence of any direct guidelines, hints from the direct litigants or a communication from the MOD, going through the process of guesswork attached to the implementation of the "Rank Pay" judgement is a bit like gingerly navigating through a pitch dark room with the knowledge of the ever-present risk of bumping into an article of furniture.

 

Some of the inputs on the subject do serve to mislead. Let's take the "Naval Brief" for instance. What practical purpose would be served by adding the rank pay to the sum of Un-revised Basic Pay, DA, IR and 20% of Basic Pay if one is to subsequently subtract the same rank pay from the sum? One might as well not bother about rank pay in that case and settle for the fixation that was done on the sum of 1.2(Basic_Pay), DA and IR and, once again, the fixation would still be as per the years of service and it'd be governed by the Basic Pay defined for each stage in the IV CPC running pay-scale. In effect, arrears would amount to a big fat zero. I don't think that's what the decades long litigation was about.

 

The most important insight that was offered in the matter has been commented upon here. The most useful views that have been received on the subject are of a subtle variety. One has to piece together some concept of what the real situation is from one's inferences.

 

I had attempted to highlight what the running pay-scale would look like if each rank stage was fixed with the sum of rank pay and the emoluments calculated by adding 20% of unrevised BP to DA, IR and unrevised BP. The increments would have to change and the increments would not be logical, as was keenly spotted here. We cannot change the number of stages in between ranks and the revised basic after adding rank pay is fixed for the starting rank of each rank. The net result is a sort of distorted running pay-scale with increments that go up and down without any logic other than of needing to fit in with the other constraints the assumptions place on the manner of fixation.

 

Therefore, we come to the other alternative for fixation, frequently mentioned in forums and blogs, of granting extra increments to each Officer while using the same old running pay-scale.  But it is to be remembered the rank-stages do not change in the running pay-scale. If they did we'd again be presented with the distortions in increments. The increments here are only for fixing the pay of Officers by taking the rank-pay into account.

 

But, in this "model" of fixation an Officer promoted subsequently to the rank of Capt would still get Rs. 2900/- as basic on completing 6 yrs, a Major Rs.3400/- on completing 12 years, and so on. As the pay-scale ends at Rs. 5100/-, this model permits only one increment in the rank of Brig.

 

This kind of pay fixation was covered in a previous blogpost. But to view it in isolation, for the sake of clarity and an emphasis on pay fixation with increments, here is another version.

 

Rank Stage Fixed By IV CPC Running Pay Scale	Basic Pay as Defined In Pay Scale	A Model For Fixation Of Pay Arrived At By Adding Rank Pay To Basic Pay Of Pay Scale {For An Officer With The Min Service For Each Rank Stage As On Date Of Fixation}
2nd Lt	2300	2nd Lt
	2400
Lt	2500	Lt
	2600
	2700
	2800
Capt	2900
	3000
	3100	Capt with 2 increments
	3200
	3300
Maj	3400
	3500
	3600
	3700
	3800
Lt Col	3900
	4050	Maj with  6 increments
	4200
	4350
Col	4500
	4650
	4800	Lt Col with 6 increments
Brig	4950
	5100	Brig with 1 increment & Col with 4 increments