INCOME TAX EMPLOYEES FEDERATION
Manishinath Bhawan A/2/95 Rajouri Garden,New Delhi. 110 027.
Telefax. 2510 5321; 6543 1807
President: K.P. Rajagopal. Secretary General: Ashok B Salunkhe
Dated: 9th August, 2011.
Decisions of the National Sectt. of the Confederation.
We send herewith the circular letter of the Confederation (dated 31st July, 2011) incorporating the decisions taken at the National Sectt. of the Confederation at its meeting held at Chennai on 30th July, 2011. The PFRDA blll might either come up for consideration by the Parliament either in this session or at the winter session. The signature campaign is very important to ensure that the implications of the bill are conveyed to our comrades effectively. Kindly get the letter to the PM printed and ensure that the same is circularted amongst our members with a request that they must sign the same and get as many signatures as possible from their family members and friends. Kindly get in touch with the State Secretaries of the Confrederation to carry out the rest of the programmes. We must ensure that large number of our members do participate in the programmes cahlked out by the Confederation. In order to ensure that the women committee's decisions are carried out, kindly talk to the ITEF members of the Committee and render whatever help is needed for them.
We have printed the declaration and the campaign material on PFRDA bill in our August issue of Aaykar. We are also sending herewith copies of the dclaration, campaign material and the letter to the PM for signature campaign for your immediate reference and action.
Ashok B. Salunkhe
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CONFEDERATION OF CENTRAL GOVT. EMPLOYEES & WORKERS.
A-2/95,Manishinath Bhawan,Rajouri Garden, New Delhi-110 027
Tel: 011-2510 5324: Mobile: 98110 48303
Conf/15/2011 Dated: 31st July, 2011.
National Secretariat meeting and its decisions.
The meeting of the National Secretariat of Confederation was held at Chennai on 30th July, 2011. Comrade S.K.Vyas President was in Chair. The following decisions were taken.
1. The campaign for popularising the charter of demands adopted at the National Council meeting held at Mumbai on 1st December, 2010 could not be undertaken in an effective manner as the major affiliate NFPE had to be busy with the preparation of the indefinite strike action.
2. The meeting decided that prior to any action programme; an intensive campaign is a pre requisite. Accordingly the following programmes were chalked out.
(a) Every affiliate will circulate the charter of demands along with the explanatory note amongst the employees. Meetings will be organised in front of all offices to explain the demands to the members. Report of such meetings will be sent to the Confederation CHQ directly. These meetings are to be organised between 5th and 10th September, 2011.
(b) Between 10th and 20th September, 2011 the State Committees of the Confederation will ensure that district level conventions are held and one of the State Committee member deployed to attend such convention in each district. The Sate Committees will send the report of these conventions to the CHQ.
(c) On 28th September, 2011 a massive Dharna programme will be organised in all State Capitals, district and divisional offices. At the State Capitals, a minimum number of 100 comrades will sit in Dharna. Lunch recess demonstrations will also be organised on the same date at the Dharna venue. One of the National Secretariat Members will attend the Dharna programme in each State Capital.
(d) All affiliates will organise a department level convention eliciting participation of the State level Executive on a date convenient to them but before 10th October, 2011. One of the National Secretariat members will make it convenient to attend such conventions.
(e) Rally and demonstration will be held in front of the office of the Chairman, Welfare Co-ordination Committee or any other central located place jointly by all the CGEs in all state capitals on 20th October, 2011.
(f) Immediate steps will be taken by all affiliate to circulate the petition to the Prime Minister on PFRDA bill. Copy of the petition will be handed over to each member to obtain his signature as also his family members and friends. The State Committee will hold a review meeting on 10th October, 2011 to monitor the progress and take necessary steps to expedite the campaign.
(g) The National Secretariat will meet at Bangalore on 22nd October, 2011 to review the implementation of the programme of action including the signature campaign and take necessary action to remove deficiencies if any noticed.
(h) The Confederation will mobilise 10000 employees to participate in the ensuing march to Parliament (date will be finalised by the Steering Committee by end of August, 2011).
(i) To organise a day's strike jointly by all the organisations which participated in the 22nd July convention. The date for the strike will be finalised by the steering committee.
(j)To organise Raj Bhawan March on a date preferably before 7th September, 2011 jointly by all participating organisations at all State capital. (This is a decision taken at the convention. The State Secretaries are requested to get in touch with all concerned and ensure that the programme is carried out.
The declaration adopted at the convention, the draft letter to the Prime Minister demanding withdrawal of the PFRDA Bill, campaign leaflet on PFRDA Bill are sent herewith. (Copies of the same are also placed on our website).
National Women Committee of Confederation met at Chennai.
The Women committee constituted by the National Women Convention held at Kolkata met at Chennai on 30th July, 2011. The Committee took the following decision. The meeting was presided over by the Chairperson, Com. Geeta Ghoshal and the proceedings were initiated for discussion by Com. C.P. Shobhana, Convenor.
1. To organise the International women's day on 8th March, 2012 at all State Capitals by organising a seminar on the subject "impact of the neo-liberal economic policies on women and women workers in particular"
2. To organise a State level Convention of women employees of the Central Government during September/October, 2011. The State Committees of the Confederation will take necessary steps to hold the convention.
3. To hold a demonstration in a prominent Central Government office by women workers in all State Capitals against the unabated price rise of essential commodities. The date will be finalised and intimated later. Steps will be taken to have massive participation of all women employees of Central Government in this programme by the State Committees.
DECLARATION ADOPTED AT THE NATIONAL CONVENTION OF CENTRAL/STATE /STATE PSU/ RAILWAY EMPLOYEES, TEACHERS (BOTH PRIMARY & UNIVERSITIES) & PENSIONERS AT MPCU SHAH AUDITORIUM DELHI ON 22ND JULY 2011
This National Convention of Govt. employees, Railway workers, Civilian Defence employees, BSNL employees teachers and pensioners held on 22nd July 2011 take serious note of re-introduction of PFRDA Bill in the Parliament in its last session. This is a most dangerous conspiracy dictated by the IMF and World Bank which would demolish the social security to the employees and workers in their old age and would work only to fatten the private profit at the cost of savings of employees and contributions from the national exchequer.
The Convention notes that the neo liberal globalization has been aimed to advance the interest of global capital at the cost of world's majority population who are faced with falling incomes, greater social and economic insecurity and greater restriction on the democratic rights. The advanced and developed countries with the aid of the Bretton Wood institutions imposed neo-liberal policies on developing, underdeveloped and undeveloped economies to pry open their market for the unbridled entry of the surplus goods and finance capital. India adopted the neo-liberal economic policies in 1991. It is now with us for more than two decades. Our economy underwent a thorough restructuring to advance free trade, unrestricted foreign investments, deregulated market, unhindered foray of finance capital, privatization of public enterprises, changing work structure, free say for entrepreneurs in the matter of employment, gradual reduction of all welfare measure, annulling of labour welfare measures, withdrawal from all social security measures, privatization of pension funds etc. Resentment over these policies, especially from the working people grew over the years and manifested itself in various forms of struggles, against privatization, outsourcing, casualisation/contractorisation, and withdrawal of various welfare measures which were in vogue for years since independence. During the last 20 years, the Indian Working class assiduously built up a united resistance platform to wage battles against these policies and we were proud participants in all those struggles. Almost near unity of the working class was brought about on 7th September, 2010, when the Indian working class organized the one day general strike and later on 23rd Feb. 2011 when half a million people rallied before Indian Parliament demanding inter alia the withdrawal of the anti-people economic policies of the Indian Govt. Insensitive to the growing pauperization of the working people and perhaps emboldened by the electoral victory, the UPA II Govt. continued unabated the pursuance of the pernicious policies and introduced various bills in the last session of the Parliament including the resurrection of the PFRDA bill to marshal the pension fund for maximizing private profit.
The very concept of defined and adequate pension (being a deferred wage) capable of providing socio-economic justice to the employees after their retirement as proclaimed by the Supreme Court of the country an enforceable right, stands dismantled as under the new dispensation pension would be fluctuating as opposed to defined or may even be a vanishing phenomena depending upon the vagaries of stock market. The terms of reference for the study group set up by Sixth CPC to go into the pension structure amply indicates a future migration even of the existing employees to the new contributory pension regime.
The wage structure of the govt employees has been designed on the premise that it is to be depressed in order to enable the government to meet the pension liability in future. The corollary drawing from this is this that the pension liability as a deferred wage is inherent in the existing wage structure. Therefore, the imposition of the new contributory pension scheme on the employees who entered service on or after cut-off date is illegal as because the deferred wage as pension which was to be earned by them on account of depressed wage structure has been denied and they have been compelled to contribute in order to earn an undefined and uncertain annuity.
The pension fund created by the employees' subscription and the employers' contribution which directly flows from the exchequer ( which is nothing but tax revenue of the Govt.) is made available for the stock market operations which is not only unethical but also blatant diversion of public fund for private profit, both foreign and Indian capitalists.
The PFRDA Bill when enacted, it is rightly feared, will empower the Government to alter or even deny the present employees and pensioners the statutory defined pension benefit as has been done in the case of those who are appointed after the cut-off date.
It is stated that the prime objective of the introduction of the contributory pension scheme is to substantially reduce the outflow on account of pension liability. The major pension liability of Government is accounted for by Armed Defence personnel. They and the paramilitary forces are however excluded from the purview of the contributory pension scheme and rightly so. While doing so, the Govt. is bound to meet their pension liability from the consolidated fund of India.
The argument advanced by the Govt. to cover the Civil Servants in the ambit of the new Pension scheme has been found to be unsustainable by the study commissioned by the 6th CPC. Shri S. Chidambaram, Actuary, in his report, (in Annexure to "A study of Terminal benefit of Central Government employees by Dt. K. Gayatri, Centre for Economic Studies and policy, Institute for Social and Economic change, Nagarbhavi, Bangalore") has pointed out that the Government liability on account of contributory pension scheme would in effect increase for a period spanning for the next 34 years from the existing Rs. 14,284 Cr. to Rs. 57,088 Cr. ( 2004-2038) and is likely to taper off only from 2038 onwards. The exchequer is bound to have an increased outflow for the next 34 years and will be called upon to bear the actual pension liability of defence personnel and personnel of para military forces, besides making the contribution to the Pension fund of the Civil Servants recruited after the cut-off date. The specious plea that the exchequer is bound to gain due to the contributory pension scheme is therefore not borne from facts.
Since most of the State Governments have chosen to switch over to "contributory pension scheme" , in fairness it can be concluded that the pension liability of all the State Governments are bound to increase to three times of what it is today by 2038.
The first version of the PFRDA Bill was placed before the Parliament by the NDA Government in 2003. The 6th CPC set up the Committee to go into the financial implication on account of the increasing number of pensioners and suggest alternative funding methodology in 2006. The said Committee came to the inescapable conclusion (report submitted in 2007) that "the existing systems of pension are increasingly becoming complicated after the introduction of the New Pension scheme" and warned that "caution has to be exercised in initiating any further reforms" In the light of the conclusion of the said study report which revealed the fact of serious escalation in the pension payment outflow, the rationale of the re-introduction of the PFRDA bill in 2011 covering the civil servants is incomprehensible. Undoubtedly, the Bill when enacted into law will throw the existing pensioners in to a financially insecure future and the existing workers to the vagaries of the stock market.
It would be pertinent to mention the inescapable conclusion of the study undertaken by the committee set up by Sixth CPC (centre for economic studies & Policy – Institute for Social & economic change) at page 76 of their report:
"Mainly given the facts that the future liability although may be large in terms of absolute size is not likely to last very long and does not constitute an alarmingly big share of GDP which is also on the decline. It appears that pursuing the existing 'pay as you go' to meet the liability will be an ideal solution".
In the light of the above we must oppose the imposition of the new pension scheme and the PFRDA Bill and demand that the defined benefit pension must be extended to all the Government employees irrespective of the fact whether they are regularly or not regularly appointed.
In the wake of the renewed attempt of the UPA II Government to dismantle the existing defined benefit pension scheme for no ostensible reasons, which has been in vogue for a century, it must be our endeavour to wage a determined battle, solicit and obtain the solidarity and support of the working class in the country, arouse the public opinion against the Bill so that those in the Treasury Benches and the dominant opposition party in the Parliament who have joined together to push the enactment will be forced to rescind their decision.
This National Convention urges upon all organizations of central and state govt employees and teachers to unite and organize the employees to launch a signature campaign on a petition to be submitted to the Prime Minister. The convention also decides that the petition to the Prime Minister will be submitted by organizing a mammoth march to the Parliament/Raj Bhawan in State Capitals at a convenient date when the Parliament will be in Session. In case the PFRDA Bill is not withdrawn and /govt employees are not brought under the statutory pension scheme, it would become imperative for the govt employees and teachers to organise industrial action including strike. This convention sets up a Steering Committee consisting of leaders from all participating federations/unions/associations to finalize the date of strike.
We appeal for active support to this struggle from all sections of employees and workers and also from those who have been or are being brought under the PFRDA Bill.
All India State Government Employees Federation
Confederation of Central Govt. Employees and Workers
All India Defence Employees Federation
BSNL Employees Union.
School Teachers Federation of India.
All India Federation of University and College Teachers Organisations.
Organizations of Railway Workers.
DRAFT PETITION FOR MASS SIGNATURE CAMPAIGN
The Prime Minister of India,
We submit this petition to bring to your kind notice certain aspects of the re-introduced PFRDA Bill which will have an extremely adverse impact on the pension and retirement benefits of the Government employees. We may also state in this connection that the contributory pension scheme will be a drain on the exchequer.
The guiding principle adopted in determining the pay package of civil servants is to spread out the wage compensation over a long period of time because of which the wages during the work tenure is low to enable pension payment on retirement. This makes the pension a "deferred wage", which the Supreme Court has upheld as such in their landmark judgment in the case of D.S. Nakara Vs. Union of India. As the bill does not provide implicit or explicit assurance of a minimum pension except marked based guarantee, the civil servant even after contributing huge sums to pension fund may end up with no annuity if the invested company become bankrupt or the equity market crashes. Moreover the annuity which would be the pension under the new scheme being not cost indexed will make it difficult for the pensions to make the both ends meet.
The Committee set up by the 6th CPC has concluded that the new contributory pension scheme will increase the outflow from the exchequer from Rs. 14,284 Crores to Rs. 57088 Crores by 2038. The Committee has also observed that the pension liability of the Government which was 0.5% of the GDP in 2004-05 under the defined benefit scheme is likely to decline if the same is not replaced by the contributory pension scheme as envisaged in the PFRDA bill. The Committee has ultimately recommended that the existing "Pay as you go" pension which is presently in vogue will be ideal and may be continued.
Since the new scheme is neither in the interest of the country as it increases the outflow on account of pension liability nor to the Civil Servants for it does not guarantee a minimum pension, we appeal to you kindly cause withdrawal of the PFRDA Bill from the Parliament immediately.
State : ………………….
Date : July, 2011
Material For Signature campaign on PFRDA Bill
We submit this Petition to bring to your kind notice and through your good office to the attention of the Honorable Parliamentarians of our country certain aspects of the re-introduced PFRDA bill, which will have adverse impact on the exchequer in general and on the prevailing service conditions of the Civil Servants. We pray that our submissions in this regard may please be caused to be considered earnestly and the implication of the provisions of the bill critically analyzed and examined and take decision to kindly withdraw the Bill from the Parliament.
We submit the following for your critical and objective analysis of the Bill :
1.The concept of old age security for civil servant in the form of pension has a very ancient origin dating back as early as third century BC, the quantum being half of the wages on completion of forty years blemishless service to the king.
2.In the last century, one of the measures taken by the colonial rulers to attract talented personnel to the Royal service was the introduction of pension scheme for civil servants 'in 1920. The Royal commission through its various recommendations improved the scheme and the 1935 Government of India Act provided it statutory strength.
3.The land mark judgment of the Supreme Court in D .S. Nakara and others Vs. Union of India (AIR-1983-SC-130)(applicable to the Central and State Government employees, teachers, and all stake holders of pension system) conceptualized pension stating that pension is neither a bounty nor a grace bestowed by the sweet will of the employer, but a payment for the past services rendered. It was construed as a right step towards socio-economic justice and a concrete assurance to the effect that the employee in his old age is not left in the lurch.
4.The fifth Central Pay Commission which was set up by the GOI in 1993 to go into the wage structure and pension scheme of the Central Government employees referring to the Judgment of the Supreme Court cited, observed (Para 127.6) that " pension is the statutory, inalienable and legally enforceable right earned by the civil servant by the sweat of the brow and being so must be fixed, revised, modified and changed in the way not dissimilar to salary granted to serving employees."
5.The guiding principle adopted in determining of pay package of civil servants is to spread out the wage compensation over a long peiord of time whereby wages paid out during the work tenure is low in order to effect payment of pension on retirement. As such civil service pension is rightly termed as deferred wage. While in the organized private sector the employer is
required to contribute equal share to the Provident Fund of the employees, the Government neither contributes to the Provident Fund of the civil servants nor takes any pension subscription from him.
6.In an unwarranted intervention in the Statutory defined benefit Pension system, the IMF in their work paper (WP/01/125,(2001) propounded the creation of a pension fund by eliciting from the Wage earners at the earliest stage of their employment so as to fetch an annuity decent enough to sustain him at the old age. In fact it was a suggestion for a retrograde change over from the defined benefit pension scheme to a defined contributory system. While suggesting so, they have categorically stated that India does not suffer demographic pressure experienced by major countries, for India's population beyond the age of 60 was about 7% in 2004 ch rose to 8.6% in 2010 and is estimated at 13.7% in 2030 and 20% in 2050.
7.The New contributory pension scheme enunciated by the Government of India and adopted by most of the State Governments is covered by the PRFDA bill. The bill inter alia, envisages a social security scheme for all who desire to have an annuity at his old age which is voluntary and not mandatory. However, in he case of Civil Servants, who are recruited to Government service after the prescribed cut -off date ( 1.1.2004 in GOI service) the scheme is mandatory in
as much as the employee is bound to subscribe 10% of his emoluments to the Pension Fund and the Govt. being the employer would contributes equal amount. No employee is entitled to opt out of the scheme.
8.Despite the inability to bring in a valid enactment, the Central and all State Governments other than those of West Bengal, Kerala and Tripura through illegal executive orders decided to impose the contributory pension system arbitrarily on the Central and State Government employees .While the Govt. of India notification excluded the personnel in the armed forces
and para-military establishments, the Governments of the Left ruled States of West Bengal, Kerala and Tripura consciously continued with the existing defined benefit pension system.
9.The PRFDA Bill stipulates that there will not be any explicit or implicit assurance of the benefit except market based guarantee. The subscriber is thus exposed to the following risks at the exit.
a)If there is a major market shock, the subscriber to the New Pension scheme may end with no ability to purchase an annuity.
b)Since annuity is and cannot be cost indexed, the real worth of the annuity might fall depending upon the inflationary pressure on the economy.
c)As per the scheme, the subscriber is to make the choice of investment portfolio. The Civil Servant being mostly uninformed in finance and investment related matters, he might end up in making wrong choices which would eventually rob him of the old age pension.
d)The subscriber is perforce to contribute to the charges of the investment managers, whose priority often is as to how much profit they could make through investment of the huge corpus of pension fund in the volatile share market .
10.The pension fund created by the employees' subscription and the employers' contribution which directly flows from the exchequer ( which is nothing but tax revenue of the Govt.) is made available for the stock market operations which is not only unethical but also blatant diversion of public fund for private profit, both Foreign and Indian capitalists.
11.In the case of Civil Servants recruited after the cut-off date, the new scheme replaces the existing much better "defined benefit" pension scheme. In the process, the Government has created two classes of civil servants viz. the one with a defined benefit pension scheme and the other with the contributory pension scheme in which the employee is to part with 10% of his emoluments to become entitled for an old age social security subject to the vagaries of share market permits. Since in both the cases, the pay, allowances, perks, and other benefits, privileges, duties and responsibilities are the same it amounts to wanton discrimination of one against another which is not sustainable in law, rather violative of the existing constitutional provisions.
12.The wage structure presently designed for those who are recruited prior to the cut- off date and after is on the same premise and is depressed to enable the Govt. to meet the pension liability in future. By imposing the new contributory pension scheme on the employees who are recruited after the cut off date the Govt. not only denies the statutory defined pension benefit to them but also compel them to contribute for earning an undefined annuity, which must be characterized as highly discriminatory.
13.Those who are covered by the contributory pension scheme will become entitled for an annuity, a portion of the accumulated contribution is able to purchase, basing upon the accretion to the fund from the investment. There is, however, no guaranteed minimum amount of pension for those who are covered by the new scheme, whereas the civil servants covered by the existing scheme do get a defined and guaranteed minimum pension and on his death his family members (wife, widowed and unmarred daughters and unemployed sons below the age of 25) become entitled for family pension. The discrimination factor is thus compounded.
14.The PFRDA Bill when enacted, it is rightly feared, will empower the Government to alter or even deny the present employees and pensioners the statutory defined pension benefit as has been done in the case of those who are appointed after the cut-off date.
15.It is stated that the prime objective of the introduction of the contributory pension scheme is to substantially reduce the outflow on account of pension liability. The major pension liability of Government is accounted for by Armed Defence personnel. They are however excluded from the purview of the contributory pension scheme. The personnel in the Para Military forces are also excluded from the ambit of the new Scheme. While doing so, (no doubt to attract the people to serve in the armed forces for security of the Nation) the Govt. is bound to meet the pension liability from the consolidated fund of India. The argument advanced by the Govt. to cover the Civil Servants in the ambit of the new Pension scheme has been found to be unsustainable by the study commissioned by the 6th CPC. Shri S. Chidambaram, Actuary, in his report, (Annexure to "A study of Terminal benefit of Central Government employees by Dt. K. Gayatri, Centre for Economic Studies and policy, Institute for Social and Economic change, Nagarbhavi, Bangalore) has pointed out that the Government liability on account of contributory pension scheme would in effect increase for a period spanning for the next 34 years from the existing Rs. 14,284 Cr. To Rs. 57,088 Cr. ( 2004-2038) and is likely to taper off only from 2038 onwards. The exchequer is bound to have an increased outflow for the next 34 years and will be called upon to bear the actual pension liability of defence personnel and personnel of para military forces, besides making the contribution to the Pension fund of the Civil Servants recruited after the cut off date. The specious plea that the exchequer is bound to gain due to the contributory pension scheme is therefore not borne from facts.
16. Of the present pension liability of the Govt. of India, which in 2004-05 was 0.51% of the GDP, 0.26% is accounted for by the Defence( which is 50% of the total pension liability.) The study report of the Centre for Economic Studies has concluded that the pension liability as a percentage to GDP which is just 0.5% presently is likely to decline given the growth rate of Indian economy.
17.Since most of the State Governments have chosen to switch over to "contributory pension scheme" , in fairness ( from the Study conducted by the Centre for Economic Studies and policy) it can be concluded that the pension liability of all the State Governments are bound to increase to three times of what it is today by 2038.
18.The first version of the PFRDA Bill was placed before the Parliament by the NDA Government in 2003. The 6th CPC set up the Committee to go into the financial implication on account of the increasing number of pensioners and suggest alternative funding methodology in 2006. The said Committee came to the inescapable conclusion (report submitted in 2007) that "the existing systems of pension are increasingly becoming complicated after the introduction of the New Pension scheme" and warned that "caution has to be exercised in initiating any further reforms" In the light of the conclusion of the said study report which revealed the fact of serious escalation in the pension payment outflow, the rationale of the re-introduction of the PFRDA bill in 2011 covering the civil servants is incomprehensible. Undoubtedly, the Bill when enacted into law will through the existing pensioners to a financially insecure future and the existing workers to the vagaries of the stock market. We, therefore, earnestly pray to your good-self to bring back all the civil servants including teachers irresespective of the date of entry into Government service as also those irregularly appointed within the ambit of the existing statutory defined pension benefit scheme.
We may, in fine, quoting the concluding paragraph (Page 76 of the report of the Centre for Economic Studies and Policy – Institute for Social and Economic Change) of the Committee set up by the 6th CPC
"Mainly given the fact that the future liability although may be large in terms of absolute size is not likely to last very long and does not constitute an alarmingly big share of the GDP which is also on the decline. It appears that pursuing the existing 'Pay as you go' to meet the liability will be an ideal solution."appeal you, for the detailed reasons adduced in the foregoing paragraphs, that the new pension scheme enshrined in the PFRDA Bill may be withdrawn from the Parliament both in the interest of the Civil Servants and the exchequer.