Saturday, March 1, 2014

The Government on Tuesday setup a four member seventh central pay commission ahead of general elections that are due by May; commission will be headed by former Supreme Court judge Justice Ashok Kumar Mathur. This commission will revise the salary structure of five million central government employees, including those in defence and railways and about three million pensioners.

The Commission has been mandated to submit its report in two years' time and its recommendations would be implemented from January 1, 2016.

Seven pay commissions have been set up on a regular basis to review and make recommendations on the work and pay structure of all civil and military divisions of the Government of India. The Sixth Pay Commission, headed by Justice B.N. Srikrishna was constituted on 5 October 2006. It submitted its report on 24 March 2008, but its recommendations were implemented from 1 January 2006.

The First Pay Commission was established in 1956, and since then the Union government usually appoints a pay commission once in a decade to revise the wages of Union government employees.

History of Pay Commissions in India
First Pay Commission
The First Pay Commission was constituted in May 1946 under the Chairmanship of Sri Srinivasa Varadachariar. Taking inspiration from the Islington Commission Report of 1912 under the Chairmanship of Lord Islington, the concept of living wages meaning that in no case an employee’s wage be less than the living wage, was taken into consideration in formulating the recommendations of the First Pay Commission. The Commission has fixed Rs.55, of which Basic Pay was Rs.30 and DA Rs.25 as the minimum wage. The recommendations were accepted by the Government.

Second Pay Commission
The Second Pay Commission was set up in August 1957 under the Chairmanship of Justice Jagannath Das and the Commission took two years to finalize the report. One of the recommendations of the Commission was that the pay structure and working environment of the government employees should be crafted in such a way as to ensure efficient functioning of the system by recruiting persons with a minimum qualification, which was earlier not followed. The Commission recommended the minimum wage at Rs.80 (Basic Pay Rs.70 and DA Rs.10) per month and reduced the multiple numbers of pay scales.

Third Pay Commission
The Third Pay Commission was set up in April 1970 under the Chairmanship of Justice Raghuvir Dayal. It went beyond the idea of minimum subsistence and added three concepts of inclusiveness, comprehensibility and adequacy for pay structure to be sound in nature as to be attractive to the employees, which, the Commission felt that it would improve the efficiency of functioning of the Government machinery. It recommended the minimum wage at Rs.185 per month and the Government raised it to Rs.196. Pay fixation formula was made more liberal. The Commission gave its report in March 1973.

Fourth Pay Commission
The Fourth Pay Commission was constituted in March 1983 under the Chairmanship of Sri P.N.Singhal. It recommended for creating permanent machinery as part of the administration to undertake periodical review of pay and allowances of the employees. However, it was never implemented by the Government. It recommended for minimum wage of Rs.750. It took four years and submitted the report in three phases. The report was implemented with effect from 01.01.1986.

Fifth Pay Commission
The Fifth Pay Commission was set up in 1994 under the Chairmanship of Justice Ratnavel Pandian. The Commission recommended for fixing the minimum wage at Rs.2550 per month, to further reduce the number of pay scales from 51 to 34 and to slash the government workforce by about 30% with grant of salary hikes to the retained employees. It took 4 years for the Commission to submit its report. During this period, the Government of India was in take-off mode with the concept of LPG (Liberalisation, Privatisation and Globalisation) in its economic reforms, for which it has to look to the World Bank and IMF and thus the World Bank has opened its mouth with criticism on the after effects of the Pay Commission recommendations on the Indian economy.

Sixth Pay Commission
Sixth Pay Commission was set up in July 2006 under the Chairmanship of Justice B.N.Srikrishna with a time frame of 18 months. While formulating pay scales with upward revision and fixing the minimum salary at entry level at Rs.6660 (Basic Pay Rs.4860 and Grade Pay Rs.1800) and maximum at Rs.80000 at Secretary level, the Commission mainly focussed on removing ambiguity in respect of the existing pay scales and, introducing the idea of ‘Pay Bands’, while reducing the number of pay scales. It recommended for removal of Group – D cadre.

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