7TH PAY COMMISSION BOARD

7th Central Pay Commission Board is Formed, Members of 7th CPC Panel

7^th Pay Commission, New Delhi: The government has announced the set up of four member seventh central pay commission which was actually initiated in September of last year but was said that the composition of the pay panel was now cleared by the prime minster Mr. Manmohan Singh. 

The four member 7^th CPC board comprised of former Supreme Court judge Mr. Ashok Kumar Mathur who is heading the commission panel and the other members included the petroleum secretary who is due his retire later this month Mr. Vivek Rao, the director of national institute of public finance and policy (NIPFP) Mr. Rathin Roy and Ms Meena Agarwal who is at present in the finance ministry.

However, this announcement of appointing the 7^th pay panel which is also a burden to the exchequer is coming just before a few weeks to the general elections which can actually be understood as a ploy to attract nearly 80 lakhs of the central government employeesand pensioners.

Generally a pay commission is set up for every 10 years to take into account the impact of inflation and cost of living to review salaries of the central government employees. The finance minister has also stated in September that the average time taken by the pay commission is two years and hence the recommendations of the 7^th Pay Commission shall come into implementation from the month of January 2016.

The panel not only looks into the matter of reviewing and increasing the pay scales but shall also discuss the working conditions and suggestions to increase the retirement age from 60 years to 62 years which may in fact force the government to defer hiring. However, the seventh pay panel reference terms are yet to be made public which shall be the right time to discuss further on this matter.  

PAY COMMISSION AND THEIR AGENDA FROM 1ST TO 6TH PAY COMMISSION

Pay Commissions and their Agendas from 1st to 6th Pay Commission

Each Pay Commission is unique

Right from the first CPC introduced in 1946 to the 6^th CPC in 2006 each has a unique agenda. The first pay commission has taken life span into consideration. The second CPC has notified that the salaries should be in accordance to run the government sector efficiently with all the required facilities. The third CPC has recommended that the salaries should be according to meet the necessities of life. The fourth CPC has recommended that a permanent department should be set up to review the central government employee’s salaries as and when required (which is not taken into consideration by the government). As the employees demanded that the government employee’s salaries should be in par with the government sector undertakings (PSUs), the fifth pay scale commission has made it clear that government service is different from the public sectors. Finally the 6^th pay commission has announced that they have focused on not only offering a proper salary package to the government employees but also to regularize the government job sector and offer best services to the common man.

Commission number	When constituted	Chairman	When was its report submitted
1st Commission	May 1946	Srinivasa Vardacharya	Within 1 year
2nd Commission	August 1957	Jagannadh Das	Within 2 years
3rd Commission	April 1970	Raghuveer Dayal	Within 3 years
4th Commission	June 1983	P.S.Singhal	Within 4 years (in instalments)
5th Commission	1994	Pandyan	Within 3 years
6th Commission	October 2006	B.N.Krishnan	Within 2 years

PRE AND POST FIRST PAY COMMISSION

Pre and Post first Pay Commission

Differences between the pay structure recommendations prior to the 1^stPay Commission and after constitution of the 1^stPay Commission

The Government of India constitutes, as a matter of convention, Pay Commissions every ten years to review and make recommendations on the wage structure of Central Government employees including Defence personnel , Railway employees and the Pensioners.

Prior to the constitution of the First Pay Commission in 1946, the 1934 pay scales were continued. Even though the Islington Commission Report of 1912 was available by then, it seems that it was not implemented. Pay scales were arbitrarily fixed and there no rationale was followed. There was no ‘minimum – wage’ concept in practice. Since by then there was British rule, unionism was either thin or may be non-existent or the basic needs of humans were limited and necessities of life were reasonably plenty, to demand or request for still better scales.

The First Pay Commission was constituted in May 1946. Since the pre and post 1^st Pay Commission periods were under British administration, probably there would not have been any interference of the Employees’ Unions even as a suggestive mechanism. However, there was a shift in the outlook of the British government for rationalising the pay scales of Government employees. Taking inspiration from the Islington Commission Report of 1912 under the Chairmanship of Lord Islington, the concept of living wage meaning that in no case an employee’s wage be less than the living wage to suit the conditions prevailing then was taken into consideration in formulating the recommendations of the 1^st Pay Commission. The Commission recommended that the lowest rung employees should get the minimum wages. It is a major shift from the earlier practice.

RESPONSIBILITY OF PAY COMMISSION

What is the responsibility of the Pay Commission?

For every ten years the central government employees has a salary revision. Though the formation of CPC (central pay commission) is delayed the benefits are being given to the employees every ten years without fail in the form of arrears. The fourth pay scale commission resolutions have been implemented from January 1986. From 1996 January salaries and pensions have been paid based on the fifth pay commission recommendations. The sixth pay commission recommendations are implemented from January 1^st 2006.  Apart from these all the other has been implemented three years prior to the new CPC implementation date. In reality the fifth and sixth CPCs have recommended that the successive CPC should be announced after five years implementation of the present CPC recommendations. In this scenario, the demands have started from January 2011 itself for the seventh CPC. With increase in rates, living cost and other expenses employees have put their hopes on this new CPC. If we observe the pay scale commission’s recommendations till now there is three times increase in the average salaries.

This is sixth pay scale commission

From 2006 January 1^st, the 6^th pay commission recommendations have to be implemented. But the central government has appointed the 6^th commission on October 5^th, 2006. With Justice Sri Krishna as the chief and Ravindra Dholakia, J S Maadhur and Sushmanadh as members this CPC has been formed. By doing a study for one and half year on March 24^th2008 they have given their report. This report with minor changes has been approved by the central government on 14^th August, 2008. These recommendations have come into act from 1^st January 2006 and in the 6^th pay commission the employees’ salaries have been hiked 2.26 times.

The Responsibility of 7th Pay Commission

The role and responsibility of pay scale commission is really tough as their decisions influence the benefits of 80 lakhs employees and pensioners families. They have to keep in view the financial burden on the government and at the same time should also be able to satisfy the employees. So CPC takes into consideration the country’s economic condition, present salaries in the private and government sectors, state government salaries and also the necessities of employees before making any recommendations. It shall collect lot of information and analyze the condition so we cannot right away say how the 7^th pay scale commission recommendations are going to be. But it is also true that with every CPC it is clear that the pay scales increases three times. So the employees can expect that they shall be given a hike in salaries on the same note.

HISTORY OF PAY COMMISSION IN INDIA

History of Pay Commissions in India

The concept of constitution of Pay Commissions for revision of pay scales of Central Government employees is peculiar to India and no other country in the world is following this pattern of specified periodical revisions as an established mode of such revisions.

The Government of India constitutes, as a matter of convention, Pay Commissions every ten years to review and make recommendations on the wage structure of Central Government employees including Defence personnel and Railway employees and the Pensioners. The Pay Commission, depending on the terms of reference, shall examine various aspects such as pay and allowances, retirement and death benefits, conditions of service, promotion policy and such other related matters and submits its recommendations to the Government, who will take the final decision as to its implementation, which may be full or partial or amended of modified.  The Chairman and Members of the Pay Commission shall be nominated by the Government. The so far followed practice for constitution of the Pay Commission is at periodical intervals of 10 years as is seen from the constitution of such Commissions in the past. It is not mandatory for the Government to constitute the Pay Commission as is seen from the fact that inspite of the Employees’ demanding for constitution of Pay Commission during the year 2003, the Vajpayee government has turned down their demand.

Prior to the constitution of the First Pay Commission in 1946, the 1934 pay scales were continued.

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.

Seventh Pay Commission

The Government of India constituted Seventh Pay Commission on September 25, 2013 and the recommendations of the Commission are likely to be implemented with effect from 1^stJanuary 2016.While hailing the decision of the Government, the Employees’ Unions have demanded for implementation of the Commission’s recommendations to take effect from 1^stJanuary 2011 in the same pattern as with the conventional periodical wage revisions for every 5 years in Public Sector Undertakings. The Commission shall study the structure of salaries of different cadres of the 50 lakh Central Government employees and 30 lakh Pensioners and recommend for upward revision of scales and allied service matters.Constitution of the Chairman and Members of the Commission shall be taken up in due course of time.

During the year 2008, the three wings of defence forces have requested the Central Government to rectify the discrepancies in the pay scales of defence personnel. They felt that since the Defence Forces are expected even to sacrifice their lives in their normal duties, there should be some variance in the pay scales of Civilian employees and Defence personnel.  Similarly, they demanded that the proviso of ‘one rank – one salary’ and ‘one rank – one pension’ should be implemented in the defence forces. After passing though different phases, in the year 2009, Prime Minister Manmohan Singh informed the Defence department that a special Pay Commission would be constituted for Defence Personnel  and a strong belief has emerged that a separate Pay Commission will be constituted in the background of the notification for 7^th Pay Commission. But, the Chief of Air Staff has expressed in his current letter to the Defence Minister that there is no need for a separate Pay Commission for Defence Forces and that it would be enough if reasonable representation of the Defence cadres is provided in the 7^th Pay Commission.

Comments

Constitution of the 7^th Pay Commission is not devoid of any criticism. Media feels its timing of the constitution of the Pay Commission is so announced that it is a ‘caret and stick’mode of bait to the Government employees, including Defence personnel and Railway employees in the background of the approaching Lok Sabha elections next year and elections to the State Assemblies of 5 states in November this year.

Industry circles felt that there is every possibility of increased rate of inflation apart from the additional financial burden on the government with notification of 7^th Pay Commission. ASSOCHAM Secretary General Mr. D.S.Rawat dubbed that if the Central Government substantially increases the salaries, the funds at the disposal of the Government would deplete and the pressure of inflation increases. He further stated that by the time the recommendations of the 7^th Pay Commission are implemented by January 2016, the financial burden in the implementation of the Food Security Act and Employment Guarantee Scheme would also increase. He questioned whether it is necessary for the Government to perennially go on fighting with Fiscal Deficit.  PHD Chamber of Commerce President Mr. Suman Jyothi Khaitan felt that the Government should concentrate on implementation of reforms for improving the financial segment and management of distribution sector and increasing the income status; and further felt that without providing the needed infrastructure and distribution sectors, economy would ultimately lead to severe inflation.

7TH PAY COMMISSION ESTIMATED PAY SCALES

7th Pay Commission Estimated Pay Scales as on 1st January 2016

Possible differences between the recommendations of the 6^th Pay Commission and the current 7^th Pay Commission.

The Sixth Pay Commission mainly focussed on removing ambiguity in respect of the existing pay scales and, introducing the idea of running ‘Pay Bands’ to remove stagnation , while reducing the number of pay scales to 20. It recommended for removal of Group – D cadre. With a wide gap in the minimum and maximum scales, the ratio was fixed at 1:12 with lowest scale at Rs.7000 at Rs.90000 at the highest level.

At the ratio on what the pay commissions were fixed so far, we have prepared a chart on possible pay scales in 7^th CPC. This is only an expectation and the readers are advised not to think this as final and please wait until the 7^th CPC report is finally declared. 

Expected pay scales of 7^th Pay Commission

Now the Seventh Pay Commission is constituted. So far conventionally the periods or Pay Revisions to Central Government employees was 10 years. However, the Employees’ Unions have been demanding for reduction of this period to 5 years in line with the conventional periodical wage revisions for every 5 years in Public Sector Undertakings. The Defence Forces are demanding for wages commensurate with the nature of their risky duties, for proper representation for them in the Pay Commission and for application of the concept of ‘one rank – one salary’ and ‘one rank – one pension’.

By the time of the constitution of the 6^th Pay Commission, the method of sanction of DA to Central Government employees was in vogue from 1^st January 2006, not as arbitrary sanction by the Government, but on a systematic basis basing of CPI (Consumer Price Index) and revision there of every six months. Citing this as virtual pay revision, the Vajpayee government has turned down the Employees’ Unions demand for constitution of Pay Commission during the year 2003. Taking this as a cue, the industry circles state that since this DA rise every six months is virtual pay revision, there is no necessity for constitution of a Pay Commission.

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; but in effect the hike may not be that much, but may be likely in the range between 10% and 30% on the actual gross salary drawn prior to 1^st January 2016, the expected date of implementation of the 7^th Pay Commission recommendations.

List of Important Departments / Companies which will get benefits

Indian Railways (Station Master, Guard, Driver, Ticket Checker, TT, Electrician etc)
Primary Teachers
Assistant Professors
High School Teachers
Non Teaching Staff
Pensioners
Army Personnels
PGT Teachers
AICTE Teachers
Associate Professor
Army Pensioners
Bank Employees
BMC Employees
BSNL Employees
BEST
BSF (Border Security Force)
CBSE Teachers
Peon
Watchman
Lecturers
Supervisor Instructor
Principal
Head Master
Doctors
Engineers
Ex-Servicemen
Air force
Navy
IAS Officers
IPS Officers
IRS Officers
Judicial Staff
KVS Teachers
Lab Assistant
Librarian
Lower Division Clerk
Upper Division Clerk
Medical Officer
Paramedical Staff
Nurses
Polytechnic Staff
Police Personnels
PSU (Public Sector Units)
University Staff
UGC Staff
ITI Staff
Kendriya Vidyalaya

List of States which is expected to implement Seventh Pay Commission

Andhra Pradesh
West Bengal
Karnataka
Bihar
Gujarat
Chhattisgarh
Maharashtra
Uttar Pradesh
Madhya Pradesh
Himachal Pradesh
Jharkhand
Jammu and Kashmir
Kerala
Manipur
Tamil nadu
Orissa (Odisha)
Punjab
Rajasthan
Uttarakhand (Uttaranchal)
Delhi
Assam

It is expected that minimum total payment will be double for most of Central Government employees. It is one of the most important thing for the employees. Higher pay scale employees will get more higher pay scale as well as pay band as per their designation and post.

We will update this website with latest news, pay scale, rules / norms. We hope that information and details on 7th Pay Commission Project Pay Scale and Grade Pay for All Pay Band will be useful to all people across the country.