Pay Commission
A
Pay Commission is a panel of members of the Union Cabinet of India for
review and revision of the salaries of government employees. It was set up by
the Central Government in the year 1965 and as an administrative committee to
determine the salaries of central government employees. Six pay commissions
have been set up till date.
First Pay Commission
Base Idea: Living Wage to Govt Sector also minimum wage to Pvt. Sector
Chairman: Srinivasa Varachariar
Constructed: May 1946
Cost Increased: ?
The
first pay commission was constituted in May 1946, and had submitted its report
in a year. and the importance is on the report. chairman was Srinivasa Varadachariar
wef The first pay commission was based upon the idea of “living wages” to the
employees, this idea was taken from the Islington Commission and the commission
observed that “the test formulated by the Islington Commission is only to be
liberally interpreted to suit the conditions of the present day and to be
qualified by the condition that in no case should be a man’s pay be less than a
living wage." The commission emphasized on the idea of the living wages
and stated that the government which is going to introduce the minimum wages
legislation for the workers of the private industry should also follow the same
principle for its own employees. The commission basically recommended that the
lowest rung employee should at least get minimum wages.
Second Pay Commission
Base Idea: Pay Structure and Job Specification System
Chairman: Jagannath Das
Constructed: August 1957
Cost Increased: 396 Million
Interval: 10 Years
The
second pay commission was set up in August 1957, 10 years after independence
and it gave its report after two years. The recommendations of the second pay
commission had a financial impact of Rs 396 million. The chairman of the second
pay commission was Jaganath Das.The second pay commission reiterated the
principle on which the salaries have to be determined. It stated that the pay
structure and the working conditions of the government employee should be
crafted in a way so as to ensure efficient functioning of the system by
recruiting persons with a minimum qualification.
Third Pay Commission
Base Idea: comprehensibility, and adequacy for pay structure to be
sound in nature, idea of minimum
subsistence
Chairman: Raghuveer Dayal
Constructed: April 1970
Cost Increased: 1.44 Billion
Interval: 27 Years (Almost)
The
third pay commission set up in April 1970 gave its report in March 1973 i.e. it
took almost 3 years to submit the report, and created proposals that cost the
government Rs. 1.44 billion. The chairman was Raghubir Dayal. The third pay commission
added three very important concepts of inclusiveness, comprehensibility, and
adequacy for pay structure to be sound in nature. The third pay commission went
beyond the idea of minimum subsistence that was adopted by the first pay commission.
the commission report say that the true test which the government should adopt
is to know whether the services are attractive and it retains the people it
needs and if these persons are satisfied by that they are getting paid.
Fourth Pay Commission
Base Idea: comprehensibility, and adequacy for pay structure to be
sound in nature, idea of minimum
subsistence
Chairman: PN Singhal
Constructed: June
1983
Cost Increased: 12.82 Billion
Interval: 13 Years (Almost)
Constituted
in June 1983, its report was given in three phases within four years and the
financial burden to the government was Rs.12.82 billion. This commission has been
set up on dated 18.3.1987 , Gazette of India (Extra ordinary) Notification No
91 dated 18.3.1987, The chairman of fourth pay commission was P N Singhal.
Fifth Pay Commission
Base Idea: ……..
Chairman: Justic Ratnavel Pandian
Constructed: 1994
Cost Increased: 17.00 Billion
Interval: 11 Years (Almost)
The
Fifth Pay Commission was set up in 1994 at a cost of Rs. 17,000 crore. The
chairman of fifth pay commission was Justice S. Ratnavel Pandian.
Financial Impact of Fifth pay
commission
With
the implementation of the Fifth Pay commission a huge burden was taken up by
the central government. It declared hike in salary of about 3.3 million central
government employees. Further, it also insisted on pay revision at the state
government level. The Fifth pay commission disturbed the financial situation of
both the Central and the State Governments and led to a hue and cry after its
implementation. The Central government's wage bill before the implementation of
the commission’s recommendations was 218.85 billion in 1996-1997 which also
included pension dues and by 1999 it shoot up by about 99% and the burden on
the exchequer was about to Rs 435.68 billion in 1999-2000.With regard’s to the
state government the bill went up by 74%. The state governments which paid
about Rs 515.48 billion in 1997 as salaries, had to pay Rs 898.13 billion in
1999 as salaries. This clearly indicates the burden on the state and the
central government. Many economists say that about 90% of the
revenue of the state went in as salaries .13 states of India were
not in a position to pay salaries to its employees due to the hike and hence
the central government’s help was sought
Criticisms of World Bank on fifth
pay commission
The
World Bank criticized the Fifth Pay commission, stating that the Fifth Pay
Commission as the 'single largest adverse shock' to the public finance of the
nation. It also said that the number of employees of the government was 'not
unduly' large, but there was a 'pronounced imbalance' in the skills. It noted
that about 93% of the employees were of 3rd or 4th grade.
Sixth Pay Commission
Base Idea: ……..
Chairman: Justice B N Srikrishna
Constructed: July
2006, Submitted its report April 2008
Cost Increased: 20.00 Billion
Interval: 16 Years (Almost)
In
July 2006, the Cabinet approved setting up of the sixth pay commission. This
commission has been set up under Justice B.N.Srikrishna with a timeframe of 18
months. The cost of hikes in salaries is anticipated to be about Rs. 20,000
crore for a total of 5.5 million government employees as per media speculation
on the 6th Pay Commission, the report of which is expected to be handed over in
late March/early April 2008. The employees had threatened to go on a nationwide
strike if the government failed to hike their salaries. Reasons for the demand
of hikes include rising inflation and rising pay in the private sector due to
the forces of Globalization. The Class 1 officers in India are grossly
underpaid with an IAS officer with 25 years of work experience earning just
Rs.55,000 as his take home pay. Pay arrears are due from January 2006 till
September 2008. Almost all the Government employees received 40% of the pay
arrears in the year 2008 and balance 60% arrears (as promised by Government)
has also been credited in Government employees account in the year 2009. The
Sixth Pay Commission mainly focused on removing ambiguity in respect of various
pay scales and mainly focused on reducing number of pay scales and bring the
idea of pay bands. It recommended for removal of Group-D cadre.
Source
of Data (Wikipedia, Indian Gazette on Pay Commission)
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