History of Pay commission in India

What is a Pay Commission?

It is an administrative system/mechanism that is set up by government of India to determine the salaries of government employees.Every Pay Commission does its research and then produces its recommendations to the government of India.Which GOI accepts or rejects. Mostly members of Pay Commission are some very senior government servants, economists, supreme court judges and people from different fields. It does its research on market, inflation, and whole lot of financial things to suggest salary changes for a particular time-frame.

First Pay Commission The First Pay Commission chaired by Shri Srinivasa Varadacharia was constituted in 1946, and since then, every decade commission is setup by GOI to decide the wages of government employees.The first pay commission was based on the idea of “living wages” to the employees. The minimum basic pay for Class IV staff was raised from `.10/- to `.30/- and for Class III from `.35/- to `.60/- per month. The Commission had fixed `.55/- as minimum wage (`.30 plus `.25 as Dearness Allowance). The recommendations were accepted and implemented in 1946.

second Pay Commission The second Pay Commission was set up in August 1957 and gave its report in two years.Shri Jaganath Das was appointed as Chairman of this Commission.The Commission revised the pay scales by merging 50% of the Dearness Allowance with basic Pay and it recommended `.80 as the minimum remuneration (basic Pay `.70/- plus DA `.10/-) payable to a Government employee.

Third Pay Commission Shri Raghubir Dayal was the Chairman of the third pay commission.The third Pay Commission, set up in April 1970, submitted its report in March 1973.The commission took almost 3 years to submit the report. The Third Pay Commission recommended Minimum remuneration of `.185 per month. Taking into consideration the employee’s views the Government modified some of the recommendations of the Commission and minimum wage was raised from `.185 per month to `.196/- per month.

Fourth Pay Commission Fourth Pay Commission was setup for the recommendations for the period between 1986 and 1996.The Fourth Pay Commission was constituted in June, 1983 and its Chairman was Shri P.N. Singhal. But the report of 4th CPC was submitted to government in three phases within a period of four years. The Fourth CPC had recommended the government to constitute a permanent machinery to undertake periodical review of pay and allowances of Central Government employees which was not implemented.

Fifth Pay Commission The Fifth Pay Commission covered the period between 1996 and 2006.The Fifth Pay Commission was set up in 1994. Its chairman was Justice S. Ratnavel Pandian. The commission gave its report in January 1997. The Government accepted most of the recommendations and issued orders in July 1997. The recommendations were implemented with effect from 01-01-1996. It recommended a reduction the number of pay scales from 51 to 34. It also noted that about 93% of the employees were in Group 3 and Group 4. The minimum starting pay was revised from `.750/ to `.2,550/-. The pay of 5th CPC scales were about 3 times higher than the pay of IV CPC. The pay scale started from `.2,550/- and ended with `.30,000/-. The hike of 12 times between lowest level and top level was maintained by V pay commission. The number of pay scales was reduced from 51 as on 31-12-1995 to 34.

Sixth Pay Commission The 6th Pay Commission was set up in July 2006 and was headed by its Chairman Justice B N Srikrishna, and has Ravindra Dholakia, J S Mathur and Sushama Nath as its other members.The commission submitted its report to the Government on March, 24, 2008.To remove stagnation, running pay bands were introduced. Four distinct running pay bands were recommended – one running band each for the categories of employees in groups ‘B’ and ‘C’ with 2 running pay bands for Group ‘A’ posts.

The revised pay bands have been implemented retrospectively from 01-01-2006. The Fifth CPC also had recommended implementation of the next Pay Commission’s revised pay scales from 01-01-2006. This was also in consonance with demands of a majority of the Associations of Government employees that had sought implementation of Sixth CPC revised pay scales from 01-01-2006.

Minimum salary at the entry level of PB-1 pay band is `.7,000/- (`.5,200/- as pay in the pay band plus `.1,800/- as grade pay). Maximum salary at the level of Secretary/equivalent is `.80,000/-. The minimum: maximum ratio 1:12. The increase from V CPC to VI CPC in all grades was 2.4 to 3.7 times. The increase ratio between 5th Pay Commission and 6th Pay Commission pay is 1:3.

Seventh Pay Commission The Manmohan Singh led UPA government formed the Seventh Pay Commission on 28 February 2014 under chairman justice Ashok Kumar Mathur with a timeline of 18 months to make its recommendations.Generally every pay commission, before recommending a pay structure, it used to analyze all the aspects including the economic situation of the country, financial resources of the government, comparison with the public sector, private sector and state government pay structure etc.

Every time the revised pay was approximately three times higher than its pre-revised level. Apart from all the factors which has been used to determine the pay revision, this simple formula of ‘common multiplying factor’ can be employed to know the 7th pay commission pay scale.

7thcpc Members Profile

Justice Shri Ashok Kumar Mathur, Chairman Click Here to View profile
Shri Vivek Rae, Member Click Here to View profile
Dr. Rathin Roy, Member Click Here to View profile
Smt. Meena Agarwal, Secretary Click Here to View profile

However Responding to a supplementary, Arun Jaitley said that recommendations for 7th cpc are expected in this year 2015 itself.

click here to see what Jaitley informs to Lok Sabha

A number of wage hike projections are going round presuming a uniform multiplying factor band between 2.5 and 3.5 taking into account the initial pay scales.

7th CPC Calculator, calculate your estimated basic after 7th CPC

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