IITs (in this post, they also "stand in" for IISc, IIMs, IISERs and other such government-funded institutions other than Central Universities) are public institutions that play by public sector rules. Within this paradigm, what kinds of arguments can the IIT faculty associations use to bolster their demand for a better deal than what the government has offered them?
While there is no universal moral law, I think they could appeal to a broad 'principle' that most people would agree with: similarly situated people in the old scheme have a right to expect that their situation in the new scheme will not be drastically different. Minor differences may be okay, but drastic differences are not; at least, not without a well-articulated justification.
[Minor and major differences will also depend on context: A difference of several hundreds of rupees may be okay in salary, but even a hundred rupee difference is not okay in Grade Pay, which is the status marker in the new regime; see No. 3, below].
If you accept this principle, it would appear that IIT faculty do indeed have a strong case on some of their demands. I can think of at least three:
Who's affected? Assistant professors in IITs.
Who are they being compared to? Readers in Central Universities.
Where is the anomaly? In the new regime, while readers (in universities) and assistant professors (in IITs) are placed in Pay Band 3 at the beginning, their situations are radically different after three years of service. Readers move to a higher pay band -- Pay Band 4, automatically, without any evaluation -- where the salaries are much higher: 46,400 (Salary of 37,400 and AGP of 9,000). This benefit has been denied to assistant professors at IITs.
Verdict: This is wrong. IIT faculty would be absolutely right in going to strike if this benefit is denied to them.
Who's affected? Everyone in the IITs -- both academic and scientific staff.
Who are they being compared to? Here, the comparison is with scientists (at all levels) in R&D organizations in the public sector.
Where is the anomaly? The R&D labs belonging to DAE, DRDO and ISRO offer an extra allowance to their scientific staff. This benefit has been denied to the IIT faculty.
[The idea behind this allowance, I believe, is to make careers in R&D attractive. However, I am not sure about the details of its implementation: I have seen different versions of this benefit: 20% of basic pay, a lump sum of about 6,000, etc. Also, I am not sure if this is a performance-based incentive or if it is given to all the scientific staff. ]
IIT folks have made a specific demand for a scholastic pay of Rs. 15,000 per month [backed by dubious arguments). Across all levels.
Verdict: I expect this demand to be accepted, but the scholastic pay may be less than Rs.15,000 per month; also, it could be a fraction of one's salary, instead of a fixed sum.
Who's affected? Associate professors.
Who are they being compared to? Professors in universities, whose salary scale in the old scheme was the same as that of associate professors in IITs.
Where's the anomaly? The Academic Grade Pay is different. It's 10,000 for university professors, while it is 9,500 for the IIT associate professors
Verdict: This anomaly must be removed. In the new regime, Academic Grade Pay is the "status indicator." People with the same status in the old scheme have every right to expect to have the same status in the new scheme.
[A similar situation exists for full professors at the IITs; there, the comparison group will have to be some other categories of people -- for example, senior scientists in DRDO. The specific demand is for an AGP of 11,000 instead of 10,500 ]