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Invisible Injustice - 88

Invisible Injustice - 88

Years ago I was working with an organization which used to swear by ‘Social Justice to the poor’. It tried to do everything possible to the poor within its power and reach. Following the principle of least difference between the highest paid and the lowest paid among the employees, it used to pay much better salary to all the fourth class employees. Consequently they received a handsome salary from the organization compared to the amount the government paid to the same category of employees. Besides, they were given meals from the canteen of the same institute at a rate of two rupees per meal.

After a few years, it came to the notice of the authorities of the institute that all the lower class employees were steeped in debt and mostly indebted to a local moneylender who comes in his car and waits in front of the organization on the salary disbursement day. On receiving salary, each of them were forced to hand over to the moneylender at least half to three fourth of the payment they received for the month as interest to the loans they had taken earlier at various times. As a result, many of them could not even meet their monthly household expenses and were forced to borrow more from the same moneylender.

Knowing the plight of all the lower class employees, the organization evolved a scheme to redeem them from their debts. Their loans with the interest were paid to the moneylender through a nationalized bank as an intermediary through an interest free loan to each employee and realizing the same through a monthly repayment of small amounts from their subsequent salary payment. However, all of them again went back to the moneylender for their financial needs and became more indebted to him and the organization gave up the plan of redeeming them again from debts.

The situation is very much similar at the national level in India. Lower the income of the people, greater will be their indebtedness.   Roughly about eighty per cent of the people in our country belong to the category of borrowers to meet their basic needs. The upper income classes also borrow; but it is mainly for investment for generating additional income or to create better living conditions. There is a day and night difference between borrowing for basic necessities and borrowing for investments.   

With reference to income and expenditure there are mainly two classes of people in the world: those who do not have enough income to meet all their normal human living expenditures and those who have surplus income to their normal human living expenditures. Expenditures for normal human living include daily expenses on nutritionally balanced food, sufficient clothing, adequate housing, education of the children up to graduation, average expenses for normal medical care and other normal social and cultural expenses. Yearly average of the total of these expenses can be estimated per family of five to six which is the national average of family number in India. Generally this is known as consumption expenditures or cost of living of a family estimated average per month or per year which are mainly grouped into food expenses and nonfood expenses. Food expenditures per year can be estimated almost accurately.

The food expenditures of a family can be estimated based on the requirements of food items prescribed by the Indian Council of Medical Research (ICMR, 1981) and also on the average prices of food items during the year. Obviously the prices of all food items increase at an average rate of 10% every year. The annual expenses of balanced food intake by a family of 5-6 was estimated in India was estimated to be Rs 1,34,000 in the year 2015. (refer: “ Drawing a Poverty Line”, Indian Currents, 22 - 28 June 2015). At 10% increase per year the same will be 1,78,354 in the 2018. The normal nonfood expenditure requirement for the same family would be five times that of the total food expenditures. (Samuelson Paul A and Nordhuas William D. in (1989) after surveying the economy of a large number of households established a constant ratio of 1:5 existing between the food and non-food expenditures of all families whose annual expenditure is matching with their income (Ibid). Hence the total nonfood expenditures of a family of five to six at present in India will be about 8,91,770 rupees (1,78,354x5) and total annual consumption expenses of food and non food items will be 10,70,124 rupees per family or 89,177 rupees per month at the price rate of the year 2018. With a minimum of unforeseen expenses of 823 rupees, the average monthly consumption expense would be minimum 90,000 rupees.

On the basis of this estimation we can assume the real reasons why the lower class employees of the above mentioned organization could not redeem themselves from their indebtedness. Now let us look at the 6th and 7th Pay Commissions of India and the national scenario of indebtedness. A cursory glance at the Table 1 shows that in the 6th Pay Commission (PC) 2008, none of the Pay Rates in any of the Pay Bands come up to Rs. 90,000 rupees per month. Hence all the 30 Pay Rates in four Pay Bands of 6th PC are DEBT NOTCHES contrasting to consumption requirement for a NORMAL HUMAN LIVING (90,000) in 2018 the current financial year.

Now let us examine the 7th pay Commission scale (2016). All the Pay Rates in all the three Pay Band do not start with a pay to meet the consumption requirement for a NORMAL HUMAN LIVING (90,000 in 2018); but those have reached towards the end of the career from the 2nd Pay Band onwards receive a pay more than the 2018 consumption rate. But it should be mentioned they are over-paid compared the 2018 average requirement of NORMAL HUMAN LIVING of Rs.90,000 per month or 3000 rupees per day including the NONFOOD EXPENDITURES.

Table 1: 6th & 7th Pay Commission Pay Scale Projections

Expected Pay Scale Table of 7th Pay Commission

PR 

PB

6 th  CPC 

Pay band

6 th  CPC 

Grade   Pay

7th CPC 

Pay Band

7th CPC 

Grade Pay

1 S-1,2

5200-20200

1800

15,000-60,000

5,000

1 S-3

5200-20200

1800

15,000-60,000

5,000

1 S-4

5200-20200

1800

15,000-60,000

5,000

1 S-5

5200-20200

1900

15,000-60,000

5,500

1 S-6

5200-20200

2000

15,000-60,000

6,500

1 S-7

5200-20200

2400

15,000-60,000

7,500

1 S-8

5200-20200

2800

15,000-60,000

8,500

2 S-9

9300-34800

4200

30,000-1,00,000

10,000

2 S-10

9300-34800

4200

30,000-1,00,000

10,000

2 S-11

9300-34800

4200

30,000-1,00,000

10,000

2 S-12

9300-34800

4200

30,000-1,00,000

10,000

2 S-13

9300-34800

4600

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