As far as fixation of pay of upgraded scales as on 1.1.2006 is concerned, the position has been made clear under Clause (A) (i) and (ii)of Rule 7 of the Revised Pay Rules 2008 contained in Pay Commission Notification dated 29th august 2008 and duly supported by Illustration - 4A. To make it more clear, the illustration 4A shows the benefit of bunching for fixation in the case of upgraded scales where the revised pay gets fixed at a stage below the minimum of  pay in pay band.The position as highlighted in the illustration is strengthened by Rule 2(ii) of the Office Memorandum dated 30th august 2008 whereunder fitment tables for fixation of pay at various stages of pay in the pre-revised scales have been prescribed. It has been made clear in Rule 2(ii) of above OM, that the fitment tables provided are to be followed   for “ Normal replacement scales” and for purpose of fixation in case of the UPGRADED SCALES the instructions under Clause (A) (i) and (ii)of Rule 7  of the CCS (RP) Rules 2008   (PAGE 35 ), Notification dated 29th august 2008  shall have to be followed.
In view of above position, the pay in the pay scale of 3050-75-3950-80-4590 with upgradation to scale of 3200-85-4900 shall have to be fixed as below:
1. Existing pay scale = 3050-75-3950-80-4590, (5200-20200+ GP Rs 1900)
2. Pay band applicable = PB-I (5200 - 20200)
3. Upgraded to the scale of = 3200-85-4900 ;(5000-20200 + GP Rs 2000)
4. Existing Pay as on 1.1.2006 = say Rs 3050 [ Minimum of 3050-75-4590]
5. Pay after multiplication by 1.86 = Rs 5680
6. Pay in the pay band = Rs 5680
(Now this PAY in PAY BAND of Rs 5680 being less than the minimum pay in pay band (i.e Rs 6060) excluding the Grade pay  as applicable under upgraded pay band 5200-20200 + GP Rs. 2000 scale , Hence pay to be fixed for Basic Rs.3050 should be Rs 6060, which is the minimum pay in pay band of GP Rs.2000 [as per Rule 7(1)(A)(ii)]. After allowing benefit of bunching for EVERY TWO CONSECUTIVE stages which are SAME from Rs.3050 onwards ,the pay for the pre-revised stage of Rs.3200 should be Rs.6250   (as illustrated in the  table attached below). For bunching increment [ 3% ] , only pay in pay band has to taken and NOT GRADE PAY. [ Refer  CCS (RP) RULES ,2008 ; PAGE 35  (A) (ii) ]

Pay in the pay band after allowing the Benefit of bunching in the pre-revised Scale of 3050-75-4590 , if admissible , will be as below
Thus, if  Basic Pay as on 1.1.2006 is :-
(a)  3050  =  6060   + GP Rs. 2000
(b)  3125  =  6060   + GP Rs. 2000
(c)  3200  =  6250   [i.e 6060+ (3%  of  6060)] + GP Rs. 2000
(d)  3275  =  6250  + GP Rs. 2000
(e)  3350  =  6440   [i.e 6250 + (3%  of 6250) ] + GP Rs. 2000
(f)   3425  =  6440  + GP Rs. 2000
(g)  3500  =  6510  + GP Rs. 2000
For BASIC Rs. 3500 , NO BUNCHING INCREMENT IS GIVEN B’CAUSE
3500 X 1.86 = 6510 ,WHICH IS GREATER THAN PREVIOUS STAGE PAY IN
PAY BAND i.e  Rs. 6440 and so  NO BUNCHING HEREAFTER .