It’s Time To Ensure Agri Incomes, Farm Wages Rise In Line With Govt Staff Salaries

With the 8th Pay Commission set to increase government salaries, Maharashtra farm leader Vijay Jawandhia raises an urgent concern- will farm wages rise at the same pace?

A few days after my article: "A 'fitness factor' for farmers and farm workers can help bridge the country's economic divide" (Bizz Buzz, Jan 31, 2025), I received a copy of a letter written to the Prime Minister by the well-known Maharashtra farm leader, Vijay Jawandhia.

I have had the pleasure of knowing Vijay Jawandhia for almost 40 years now, ever since he came to participate in the gherao of the Punjab Raj Bhawan by protesting Punjab farmers at Chandigarh, in 1984. While we have remained in touch ever since, what I admire in him is his ability to decipher and dissect the farm price conundrum so effectively, backed by data coming in for international prices, that makes me think he is much ahead of the curve. The way he weaves an analysis, drawing from what has happened in the past, and that has often been forgotten or ignored, I find it a telling treatise on the economic shift that is very cleverly and quietly coming about. And that makes him stand tall not only among farmer leaders but also among the corporate-savvy mainline economists (if at all a comparison is ever made).

Anyway, let's first return to the letter I mentioned. The latest missive that he sent to the Prime Minister should come as an eye-opener. While I find the contents startling, to say the least, but still for many it should come at least as an eye-opener.

In his letter in Hindi, Jawandhia talks of the 8th Pay Commission, a formal announcement for which was recently made. My column in this newspaper that appeared a few weeks back too had called for introducing a 'fitness factor' on the lines of a 'fitment factor' that has been developed and applied to working out the rise in employee salaries. As we all know the pay commissions are constituted after a gap of 10 years. For the benefit of readers who may be finding it difficult to connect the dots, this is what I wrote: The underlying aim is to 'keep the salaries of government employees and pensioners in line with rising inflation. It adjusts the basic salary to the new scale by increasing it by a certain multiplier. It has a direct impact on the gross salary and pensions. Through this, it ensures maintenance of the purchasing power of the employees and improves their economic conditions.'

The multiplier that I am talking about is known as the 'fitment factor'. It is generally believed that the basic and grade pay salaries increase by a factor of 2.28 to 2.86 which is the 'fitment factor' that is applied to make the calculations simple and easier.

Jawandhia writes that by the time India completes a century after Independence in 2047, which means attaining the status of 'Viksit Bharat', there would be a need for two more Pay Commissions. Since the 8th Pay Commission will formally begin from 2026, it means the 9th Pay Commission will come into play from 2036, and the 10th Pay Commission will start operating from 2046. Going by the media speculations, the indications are that a 'fitment factor' of 2.5 to 3 will be applied to enhance the salaries and pensions of government employees during the 8th Pay Commission, which means the minimum basic salary will increase from the existing Rs18,000 and will be fixed somewhere around Rs45,000 per month.

This is for the next ten years as long as the 8h Pay Commission remains in operation. But using the same multiplier for the 9th Pay Commission and subsequently for the 10th Pay Commission, he expects the minimum salaries to be around Rs4.5 lakh per month in 2046 - a perfect time for government employees to celebrate the dawn of Viksit Bharat.

I must admit that when I wrote about introducing a 'fitness factor' for farmers and farm workers, I had not visualised what would be the pay structures prevailing thirty years hence. That is what keeps Jawandhia far ahead of others.

In the 8th Pay Commission, minimum salaries will jump from about Rs41,000 to Rs50,000 per month depending on what multiplier is being used. Interestingly, during the time of the 5th Pay Commission, and applying the fitment factor, the minimum basic salary at that time was Rs2,550 per month. In the 6th Pay Commission, it rose to Rs7,000 per month And in the 7th Pay Commission, which came into effect in 2016, the minimum salary jumped to Rs18,000 per month. In the same way, depending on what exact formula of 'fitment factor' is applied, the minimum salary, as said earlier, will be between Rs41,000 per month and Rs50,000 per month.

Interestingly, if a 'fitment factor' of 2.5 is applied in the 9th Pay Commission in 2036, the minimum salary will rise to Rs1.5 lakh. Fair enough, but applying the same 'fitment factor' in the 10th Pay Commission in 2046, Jawandhia's calculations for the minimum monthly salary to be around Rs4.5 lakh per month in 2046 is also correct.

The basic purpose of drawing attention to the massive salary jump expected in the next three decades is not to express any opposition but to ensure that farm wages also go up in the same proportion. He asks whether it will be possible to get farm wages at $8 to $10 (Rs850 on average) per hour as the American workers are getting now. The point he is making is whether Indian farm wages will reach the level of wages that American farm workers are getting now.

Similar to what Jawandhia is juxtaposing, in my article I too had asked: 'It will make a lot of economic sense if the rural wages also go up in the same proportion', but the farmer leader thinks that may not be so. He doesn't expect farm wages to go in the same proportion and hence seeks assurance that the government then will provide at least Rs850 per hour wages to farm workers, what the American farm workers getting now.

This is rather unfair. I see no reason why farm wages should be kept at what the US does now, in 2025. As a growing economy, there is no reason why the farm wages in 2046 should not match the wages in the US prevailing at that time. In my understanding, the best way is to come out with a parallel 'fitness factor' for farmers and farm workers. Using the same matrix, let's ensure that farm incomes and farm wages increase in the same proportion. Farmers and farm workers cannot be left languishing at the bottom of the economic spiral.

I hope the other farm leaders are listening too.

(The author is a noted food policy analyst and an expert on issues related to the agriculture sector. He writes on food, agriculture and hunger)