Dr. RAJAN M.P
Email:
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16th Sept. 2008
Academic Pay- Facts and Figures A study under IIT system. M.P. Rajan, Department of Mathematics, IIT Guwahati
In this report, I would address the following issues. 1. Comparison of pay between academics and industry. 2. How much is the annual salary of an IIT faculty under the existing pay scale? 3. Are we paid less at the entry level or at the senior level? 4. Comparison of the academic pay at the international level 5. Forecast of IIT pay scale in view of 6th PC 6. A proposed pay scale 7. What IIT’s should do to attract and retain talents? Suggestions and Conclusion
Introduction Education is the process or art of imparting knowledge, skills and judgment. Education tames the astray mind, nurturing its capabilities the same way as training builds a clever dog. It is a foundation for a preparation for meaningful life. It is aimed at the all round development of an individual and dispels ignorance. Moreover, it is an essential ingredient in the development of an individual as well as a nation. Academicians play an important role in the transmission of knowledge and skills to students. The education has high impact on economic growth and social development of a nation. For sustainable development, quality education should be provided not only at the basic level but also at the higher education level. The wealth of a nation not just depends on the economic power but also the skilled manpower it posses. Achievements in Science and technology is also a barometer for the development of a nation. This results in a positive societal transformation. As an example, Science and technology has been in the forefront of transforming the Indian economic structure helping India evolve as a globally competitive economic powerhouse. With the available scientific manpower--which is third largest in the world- the Indian science and technology has been growing well above world average. To achieve these kind of growth, apart from constant effort of the governments, the contribution of the academician’s` and the scientists in leading institutions played a major role. Due to this combined effort, high end basic research and the development of cutting edge technologies to service the technological requirement of a common man could be met in some extent. India is famous for providing quality higher education through IITs, IISc, IIMs and other national institutions. The academic pay in such institutions are very low compared to industry and similar institutions in the other parts of the world. Academicians are responsible for creating technocrats but their pay is very less compared to technocrats. In this report ,we analyze some of the problems faced by the academicians and propose a suitable pay scale. There are lots of discussions taking place in reviewing the pay scale of the academicians and I hope this study, made under the IIT system, would help to reveal certain facts associated with the academic pay relevant in India. Even though the study is conducted under IIT system, it is still applicable to academic institutions follows similar structure. In the following sections, we would address these problems.
Associate Professor in Mathematics and Finance, Department of Mathematics, IIT Guwahati
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Dr. RAJAN M.P
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16th Sept. 2008
Comparison between Academic and Industrial Pay There was a demand for analyzing fresh PhD’s salary in industry against the entry level( that I would assume at Assistant Professor level.) salary in IIT. The following figure shows the past 5 years average salary package(CTC), offered to PhD candidates by industry ( thanks to placement office, IITM for providing the data). I have removed some outliers and approximated some figures.
Note that every year, there is a 150% increase in the salary for a fresher. In general, in industry, there is 15% to 20% increase of salary every year. We assume that there is a 15% hike in salary every year in industry. If this is the case, with 2007 as the base year, the next 12 years projection would be the following.
Associate Professor in Mathematics and Finance, Department of Mathematics, IIT Guwahati
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Dr. RAJAN M.P
Table I (projection -industry) Year 0 Salary in 7 lakhs( rounded)
5 16
6 18
10 32
12 42
.
How much is the annual salary of an IIT faculty under the existing pay scale? Existing pay : Table II Assistant Professor Pay in Grade the pay Pay band 12000 6000
Revised Basic Pay 18000
Associate Professor Pay in Grade the pay Pay band 16400 8200
Revised Basic Pay 24600
Professor Pay in the pay band 18400
Grade Pay 9200
Revised Basic Pay 27600
Certainly one cannot expect such an increase in salary in government sector. My analysis is applicable only for IIT/IISc community / other academic institution provides accommodation in the campus with similar features. While analyzing the pay package, we would also try to find out whether “we paid less at the entry level or at the senior level?”.
Associate Professor in Mathematics and Finance, Department of Mathematics, IIT Guwahati
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Dr. RAJAN M.P
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By senior level, I do mean by counting the number of years of experience at any level. The analysis is given below. In this analysis, I make the following assumptions. • • • • •
Working location is IIT Chennai.. This is because the living expense in terms of accommodation is little bit high in Bombay, Delhi and Bangalore and less in Guwahati, Kharagpur and other cities. I would also fix the monthly rent of a 2 or 3 bedroom apartment is 15500 in Chennai. All are staying in the campus All avail the full amount of telephone reimbursement and book grant. License fee is fixed at Rs.500 for availing quarters through out all levels for ease of computation.
What is the pay at Assistant Professor Level? Table III Salary Component\Year Part I – variable component 1. Basic 2. DP 3. Basic +DP 4. DA (a) Total( 3+4) Part II Other benefits( almost fixed pay component) 5. Accommodation(availing quarters). Taken only approx. fig. 6. Telephone 7. Books ( 4000/12) 8. PF(12.5%) (b) Total ( 5+6+7+8) Grand Total( a + b) CTG per annum
2007
2008
12000 6000 18000 7200 25200
12420 6210 18630 8756 27380
10000 ( 15500 -30%* item3 – 500 (license fee))
11000 ( 16500 – 30%* item3license fee, approx.) 10% increase in rent every year 750 333 2328 14411 41791 Around 5. 01 lakhs
750 333 2250 13333 38533 Around 4.62 lakhs
If we look at the variable pay component, Part I, Total(a), there is an average of 8.5% increase in salary every year. Taking an average salary of these two years, the average salary at the assistant professor level is around 40000. i.e. around 5. lakhs per annum. Is that bad? I haven’t taken into account children’s education pay, member ship fee, LTC etc. But where is the problem? If you look at the Grand Total per annum, which I would call as Cost to the Government(CTG) or Cost to the Institute(CTI), there is approximately 8.2% increase in salary at the Assistant Professor level every year. If we consider the base year as 2007 with 5lakhs CTG, after 5 years annual salary at the Assistant Professor level would be 7.4 lakhs and after 10 years it would be around 11 lakhs. These figures never match with industrial salary, which are 16 lakhs and 32 lakhs respectively. The above analysis shows that entry level salary is not so bad but when you get experienced your salary is not growing in par with industry. If we analyze the salary at the Associate and Professor level( Refer Table IV and Table V below), we can see that variable component is growing less than that of Assistant professor level and CTG growth is less than 8.2%. Assuming that a person gets the promotion after 5 years to Associate level or to Professor level after 10 years starting his career at the Assistant Professor level, the salary getting in academics is far less than the industry. That means, even a person gets promoted to the higher level, his salary is not going to match with industrial pay. These problems should be addressed in the revised pay scale.
Associate Professor in Mathematics and Finance, Department of Mathematics, IIT Guwahati
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Dr. RAJAN M.P
16th Sept. 2008
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What is the pay at Associate Professor Level? Table IV Salary Component\Year Part I – Variable Component 1. Basic 2. DP 3. Basic +DP 4. DA (a) Total( 3+4) Part II Other benefits( almost fixed pay component) 5. Accommodation(availing quarters). Taken only approx. fig. 6. Telephone 7. Books 8. PF(12.5%) (b) Total ( 5+6+7+8) Grand Total( a + b) CTG per annum
2007
2008
16400 8200 24600 9840 34440
16850 8425 25275 11879 37154
10000 ( 15000 -30%* item3 – license fee)
11000 ( 16500 – 30%* item3 – license fee, approx.) 10% increase in rent every year 750 333 3159 15232 52386 Around 6.28 lakhs
750 333 3075 14158 48598 Around 5.83 lakhs
What is the pay at Professor Level? Table V Salary Component\Year Part I – Variable Component 1. Basic 2. DP 3. Basic +DP 4. DA (a) Total( 3+4) Part II Other benefits( almost fixed pay component) 5. Accommodation(availing quarters). Taken only approx. fig. 6. Telephone 7. Books 8. PF- approximately (b) Total ( 5+6+7+8) Grand Total( a + b) CTG per annum
2007
2008
18400 9200 27600 11040 38640
18900 9450 28350 13325 41675
10000 ( 15000 -30%* item3 – license fee)
11000 ( 16500 – 30%* item3 – License fee, approx.) 10% increase in rent every year 750 333 3453 15626 57301 Around 6.87 lakhs
750 333 3450 14533 53173 Around 6.38 lakhs
Comparison of the academic pay at the international level But can we compare an apple with a jackfruit? An apple must be compared only with an apple. If we look at the salary of academic job at the international level , it is around $50000 to $60000 per annum at the Assistant Professor level, around $75000-$80000 Associate level and it could be
Associate Professor in Mathematics and Finance, Department of Mathematics, IIT Guwahati
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16th Sept. 2008
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Dr. RAJAN M.P
even more than $100000 at the Professor level. Taking the approximate salary as 50K, 75K and 100K respectively at these levels, we have the following figures. (Usually Dollar: Rupee is 4:1. ) Assistant Prof. : = 12.5K ( around 5 lakhs). Associate Prof. := 18.75K( 7.5 lakhs) and Prof. := 25k ( around 10 lakhs). I don’t have an idea about other benefits offered at these positions. Adding approximately 2 lakhs per annum as other benefits offered, the approximate pay at the international level could be 7 lakhs at Assistant, 9.5 lakhs at Associate and 12 lakhs at the Full professor level.( I found this pay is around 10 lakhs, 13 lakhs and 15 lakhs respectively in some places). Taking into account the inflation, the ratio between USD and INR as 3:1, the estimated salary could match approximately with the above figures.
Can we get the same pay under the revised pay scale? As per 6th pay commission report: Table-VI Assistant Professor Pay in Grade the pay Pay band 22320 7600
Revised Basic Pay 29920
Associate Professor Pay in Grade the pay Pay band 39690 8900
Revised Basic Pay 48590
Professor Pay in the pay band 44700
Grade Pay 10000
Revised Basic Pay 54700
Salary expectation of Assistant Professor: Table VII Salary Component\Year Part I - Variable component 1. Pay in the Pay band 2. Grade Pay 3. Basic +DP 4. DA (a) Total( 3+4) Part II Other benefits( almost fixed pay component) 5. Accommodation(availing quarters). Taken only approx. fig.
2007
2008
22320 7600 29920 1795 31715
22989 7600 30589 4894 35483
6000 ( 15500 -30%* item3 – 500 (license fee))
6. Telephone 7. Books 8. PF(12.5%) 9. Transport Allowance (b) Total ( 5+6+7+8+9) Grand Total( a + b) CTG per annum
750 333 3740 1856 13679 45394 Around 5.44 lakhs
7000 ( 16500 – 30%* item3-500, approx.) 10% increase in rent every year 750 333 3823 1856 13762 49245 Around 5.9 lakhs
As per revised pay, the projected salary at the Assistant Professor level in next 12 years is given below.
Associate Professor in Mathematics and Finance, Department of Mathematics, IIT Guwahati
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Dr. RAJAN M.P
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Table VIII (projection – Assistant level) Year 0 5 Salary in 5.44 8.15 lakhs( rounded)
6 8.8
10 13.2
12 14.3
Salary expectation of Associate Professor under revised pay: IX Salary Component\Year Part I - Variable Component 1. Pay in the Pay band 2. Grade Pay 3. Basic +DP 4. DA (a) Total( 3+4) Part II Other benefits( almost fixed pay component) 5. Accommodation(availing quarters). Taken only approx. fig.
2007
2008
39690 8900 48590 4373 52963
40790 8900 49690 7950 57640
500 ( 15500 -30%* item3 – 500 (license fee))
1000 ( 16500 – 30%* item3-500, approx.) 10% increase in rent every year 750
6. Telephone
750
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7. Books 8. PF(12.5%) 9. Transport Allowance (b) Total ( 5+6+7+8+9) Grand Total( a + b) CTG per annum
333 6073 1856 9512 62475 Around 7.49 lakhs
16th Sept. 2008
333 6211 1856 10150 67790 Around 8.13 lakhs
The projected salary at the Associate Professor level in next 12 years is given below.
Salary expectation of Professor under revised pay: X Salary Component\Year 2007 Part I – Variable Component 1. Pay in the Pay band 44700 2. Grade Pay 10000 3. Basic +DP 54700 4. DA 4923 (a) Total( 3+4) 59523 Part II Other benefits( almost fixed pay component) 5. Accommodation(availing -2150 ( 15500 -30%* item3 – 500 quarters). Taken only approx. fig. (license fee)) 6. Telephone 7. Books 8. PF(12.5%) 9. Transport Allowance
750 333 6837 1856
2008 46041 10000 56041 8966 65007 -812 ( 16500 – 30%* item3-500 , approx.) 10% increase in rent every year 750 333 7005 1856
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(b) Total ( 5+6+7+8+9) Grand Total( a + b) CTG per annum
7626 67149 Around 8.05 lakhs
16th Sept. 2008
9132 74139 Around 8.89 lakhs
All these analysis shows that academic pay in IIT’s neither match with the industry nor with the academics salary at the international level. So we must revise the salary under 6th pay scale. A proposed pay scale By keeping the basic pay of the Assistant Professor at the starting pay of PB4, 37400 which is 3.12 times that of the existing basic pay and one needs to subsequently revise the pay scale of Associate Professor and Professor. Proposed Pay :Table XI Assistant Professor Pay in Grade the pay Pay band 37400 9000
Revised Basic Pay 46400
Associate Professor Pay in Grade the pay Pay band 51168 11000
Revised Basic Pay 62168
Professor Pay in the pay band 57408
Grade Pay 13000
Revised Basic Pay 70408
If we look at the revised pay scale of higher ups ( For eg. President, Vice President, Governor etc.), we can see that revised salary is three times the existing salary. So there is no harm in
Associate Professor in Mathematics and Finance, Department of Mathematics, IIT Guwahati
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Dr. RAJAN M.P
16th Sept. 2008
Email:
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proposing 3.12 times salary for IIT faculty. This is equivalent to pushing the existing salary of Assistant to revised pay of Associate, Associate to the revised pay of Professor, Professor to revised pay scale of senior professor and Director to the revised pay scale of Cabinet secretary level. Taking Table XI into account, the proposed salary at the Assistant Professor level could be: Salary Component\Year Part I – Variable Component 1. Pay in the Pay band 2. Grade Pay 3. Basic +DP 4. DA (a) Total( 3+4) Part II Other benefits( almost fixed pay component) 5. Accommodation(availing quarters). Taken only approx. fig. 6. Telephone –proposed 18000 p.a 7. Books 8. PF(12.5%) 9. Transport Allowance 10. Medical Reimbursement (b) Total ( 5+6+7+8 +9 +10 ) Grand Total( a + b) CTG per annum
2007
2008
37400 9000 46400 4176 50576
38522 9000 47522 7603 55125
1120 ( 15500 -30%* item3 – 500 (license fee)) 1500
1700 ( 16500 – 30%* item3-500, approx.) 10% increase in rent every year 1500
333 5800 1856
333 5940 1856
10609 61185 Around 7.34 lakhs
11329 66454 Around 7.97 lakhs
Associate Professor in Mathematics and Finance, Department of Mathematics, IIT Guwahati
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Dr. RAJAN M.P
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16th Sept. 2008
Note that the above package is in par with international standard and equally competent with the industry salary up to tenth year.
What IIT’s should do to attract and retain talents? Suggestions and Conclusion 1. Each IIT should project the CTG or CTI along with the basic pay while advertising for faculty position to attract people at the entry level. 2. In order to keep the existing faculty in its fold, (a) Relax the rules on sabbatical so that a faculty could work else where (industry or academics) of his/her choice. This would enable a faculty to uplift his/her financial status in the society in par with the industrial counterpart in addition to the knowledge that he gains by working elsewhere. (b) Promote entrepreneurship among faculties (c) Introduce more non-taxable incentives. (d) Allow internal transfer among IITs. This not only helps to keep the faculty in IIT community folder but also effectively utilizing his/her expertise in other sister concerns. (e) Relax the rules to generate money through consultancy work 3. In case, there is a problem of fixing basic pay as proposed, Part-II component in the CTG calculation should be adjusted by offering additional incentives in such a way that CTG or CTI should be in par with the proposed CTG.
Associate Professor in Mathematics and Finance, Department of Mathematics, IIT Guwahati
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Dr. RAJAN M.P
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16th Sept. 2008
4. Part-II component can be increased by including a minimum amount for medical reimbursement, LTC and other cash incentives. If there is no claim for medical or LTC, the amount should be remitted to his/her account after deducting the tax. 5. Analysis shows that the overall increase of CTG under expected 6th PC is around 17% at Assistant level, around 25 % at the Associate and Professor levels. But taking the current tax bracket into account, the overall return is around 16% at the Assistant Professor level and around 9% at Associate and Professor levels. This shows that effective income (after deducting tax) is not growing at the Associate and Professor level under the expected 6 p. c scale. Increase of the basic end up with paying more tax, unless government changes the rule, rather than increasing overall income and this will not help to cope up with inflation. 6. Analysis also shows that industrial package is better than academic package but taken into account the stability part and the commitment of the government to the society and the GDP of the nation, one cannot ask for such a pay in academic sector. But this problem can be rectified by incorporating item 2. mentioned above in the academic structure. 7. Another important point revealed by the analysis is that academic pay is not in par with international standard. Current pay is not even meeting the one-fourth or one-third of the international pay. This problem can overcome by re-fixing the basic pay around three times the existing basic and that in turns take care of the inflation. 8. As a final note, the pathetic situation is that academicians create technocrats but their pay is very less. This is a long standing problem and that has to be addressed by the government in the revised proposal. Remark: In my analysis, I haven’t taken into account the qualitative and stability part because it is more or less a subjective matter. My emphasis was on the quantitative side. Of course, quality is one of the variables that have a relationship with quantity and the philosophy is: How much one worth depends on how good he is! However, commenting on the qualitative aspect, we know that many multinationals are coming into India because they know that they would get quality people with cheap rate. So I assumed that IIT hires only quality people and that meets the international standard. ************END OF THE REPORT************
Associate Professor in Mathematics and Finance, Department of Mathematics, IIT Guwahati
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