The document summarizes the role and history of pay commissions in India. It discusses the seven pay commissions that have been established so far to make recommendations on salaries and pay structures for government employees. Key details provided include the timeline and recommendations of each commission. The document also outlines important demands from the 7th Pay Commission, including a minimum pay of Rs. 18,000 per month and a 16% increase in basic salary.

1. PRESENTED TO: - PRESENTED BY: -
Dr. Anshu Yadav Jai Prakash
Faculty of IBM MBA 3rd Sem.
Batch: (2015-17)
PAY COMMISSION AND THEIR
ROLE IN WAGE REVISION IN
INDIA

2. WHAT IS A PAY COMMISSION ?
o The pay commission is an administrative system that the
government of India set up in 1956 to determine the salaries
of government employee.
o Since India independence, seven pay commission have been
set up on a regular basis to review and make recommendation
on the work and pay structure of all civil and military
divisions of the government of India.
o Headquarter in Delhi, the commission is given 18 months
from the date of its constitution to make its
recommendations.

3. ALL PREVIOUS PAY COMMISSION
First Pay Commission:
o First pay commission was established on January, 1946 and
its submitted its report on May, 1947 to the Government of
India.
o Government employees should be paid a living wages.
o Also recommended for payment of dearness allowances.

4. Second Pay Commission:
o The second pay commission was set up in August 1957, 10
years after independence and it gave its report after two years.
o The recommendations of the second pay commission had a
financial impact of Rs. 396 million. The chairman of the
second pay commission was Jagannath Das.
o The second pay commission reiterated the principle on which
the salaries have to be determined.
o It state 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.
CONTD ...

5. Third Pay Commission:
o The third pay commission set up in April 1970 gave its report
in March 1973, it took almost 3 years to submit the report,
and create proposals that cost the government Rs. 1.44
billion.
o The chairman was Raghubir Dayal.
o Appointment of temporary employees, equal payment should
be made for equal work, externally competitive compensation
to prevent misbalance with other employees.
o Dearness allowances should be treated as part and parcel of
compensation structure.
CONTD ...

6. Fourth Pay Commission:
o Constituted in June 1983, its report was given in three phases
within four year and the financial burden to the government
was Rs.12.82 billion. This commission has been set up on
18th March 1987.
o The chairman of fourth pay commission was P N Singhal.
o It recommended that dearness allowance should be paid.
CONTD ...

7. Criteria of paying cost of living
CONTD ...
Basic pay Dearness allowances paid
Up to Rs. 3500 per month 80%
Rs.3500-6000 per month 75%
Above Rs.6000 per month 65%

8. Fifth Pay Commission:
o 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.
o 40% increase in pay with 30% reduction in manpower over a
three year period, increasing contract employment and
bringing about greater accountability of government
employees.
o Also emphasizes on new means of recruitment and bringing
innovation in training, performance appraisal, transfer
policies and greater accountability.
CONTD ...

9. Sixth Pay Commission:
o In July 2006, the Cabinet approved setting up of the sixth
pay commission. This commission has been set up
under Justice B.N. Shri krishna with a timeframe of 18
months.
o 40% increase in pay.
o Group ‘D’ category employees and compensation of
secretary level personnel has been recommended for
substantial rise. The pay differential between junior
employees and senior officer stands increased to 1:12.
CONTD ...

10. o The government of India accepted and implemented the
recommendation of it by the announcement made by Prime
Minister Dr. Man Mohan Singh on 14th April 2008.
o Certain recommendation were rejected.
1. Three closed holiday for government employees, flexi
work hours for women's and flexi weeks for disabled.
2. The government has notified and improved three pay bands
and charged grade pay.
CONTD ...

11. 7TH PAY COMMISSION
o The government of India has initiated the process to
constitute the 7th Pay Commission along with the finalization
its terms of reference.
o On September 25, 2013 the finance minister P Chidambaram
announced that the Prime minister Manmohan Singh has
Approved the constitution of the 7th pay commission.
o Its recommendations are likely to be implemented with effect
from January 1, 2016.
o Justice A. K. Mathur will be heading the 7th Pay
Commission, announcement of which was done on 4th
February 2014.

12. o Key members of this Pay Commission:
Name Designation Role in Commission
Justice Ashok Kumar
Mathur
Retired Judge of the
Supreme Court and
Retired Chairman,
Armed Forces
Tribunal
Chairman
Vivek Rae Secretary, Ministry of
Petroleum and Natural
Gas
Member (Full Time)
Dr. Rathin Roy Director, NIPFP Member (Full Time)
Meena Agarwal OSD, department of
Expenditure, Ministry
of Finance
Secretary
CONTD ...

13. KEY POINTS OF 7TH PAY COMMISSION
o The commission has recommended a 16% hike in basic
salary + increase in DA and allowances like HRA.
o The total increase will be 23.55% of the Gross salary (Basic
+ DA + Allowances).
o The minimum pay in govt. is recommended to be set at Rs.
18,000 per month.
o Maximum pay is recommended as Rs. 2,25,000 per month.
o Rs. 2,50,000 per month for Cabinet Secretary and others at
the same level.
o The rate of annual increment retained at 3%.

14. o Short service commission officers will be allowed to exit the
armed forces at any point in time between 7 to 10 years of
service.
o Commission recommends abolishing 52 allowances, another
36 allowances subsumed in existing allowances or newly
proposed allowances.
o The commission has proposed a status quo on the retirement
age of central government employees. Retirement age for
staff employees is 60 years.
o Total impact of are expected to entail an increase of 0.65%
points in the ratio of expenditure on to GDP.
o Recommendations will impact 47 lakh serving govt.
employees, 52 lakh pensioners, including defence personnel.
CONTD ...

15. o One Rank One Pension proposed for civil government
employees on line of OROP for armed forces.
o Ceiling of gratuity enhanced from Rs. 10 lakh to Rs. 20 lakh,
ceiling on gratuity to be raised by 25% whenever DA rises by
50%.
o Military Service Pay (MSP) ,which is a compensation for the
various aspects of military service, will be admissible to the
defence forces personnel only.
CONTD ...

16. o Financial impact of implementing recommendations will
be Rs. 1.02 lakh crore-Rs. 73,650 crore to be borne by
Central Budget and Rs. 28,450 crore by Railway
Budget.
o The 16% hike in basic salary is much lower than the
35% hike employees got in the sixth Pay Commission.
CONTD ...

17. IMPORTANT DEMANDS OF THIS PAY
COMMISSION
Pay scales are calculated on the basis of pay drawn in pay
band + GP+ 100% DA by employees as on 01/01/2014.
7th CPC report should be implemented 01/01/2014. In future
five year wage revision.
Scrap New Pension Scheme and cover all employee under
Old Pension and Family Pension Scheme.
Ratio of minimum and maximum wage should be 1:12.5.
General formula for determination of pay scale based on
minimum living wage demanded for MTS is pay in PB +
GP.

18. Annual rate of increment @ 3% of the pay.
Fixation of pay on promotion = minimum two increments.
Dearness Allowances on the basis of 12 monthly average of
CPI, Payment on 1st Jan and 1st July every year.
Overtime Allowances on the basis of total Pay + DA+ Full
TA.
Liabilities of all Government dues of persons died in harness
be waived.
Transfer Policy Group ‘C and D’ Staff should not be
transferred. Donot should issue clear cut guideline as per 5th
CPC recommendation. Govt should form a Transfer Policy in
each department for transferring on Mutual basis on
promotion. Any order issued in violation of policy framed be
cancelled by head of department on representation.
CONTD ...

19. The pay structure demanded is as under:-
(Open ended pay scales-Total 14 pay scales)
SRNO. PAY CLASS PAY
1 PB-1,GP Rs. 1800 26,000
2 PB-1,GP Rs. 1900 PB-1,GP Rs.2000 33,000
3 PB-1,GP Rs. 2400 PB-1,GP Rs.2800 46,000
4 PB-2,GP Rs. 4200 56,000
5 PB-2,GP Rs. 4600 PB-2,GP Rs. 4800 74,000
6 PB-2,GP Rs. 5400 78,000
7 PB-3,GP 5400 88,000
8 PB-3,GP 6600 102,000
9 PB-3,GP 7600 120,000
10 PB-4,GP 8900 148,000
11 PB-4,GP 10000 162,000
12 HAG 193,000
13 APEX SCALE 213,000
14 CABINET SECRETARY 240,000
CONTD ...

20. New Pay scales minimum in comparison with
Sixth CPC Grade Pay.
SL GRADE PAY OF 6TH CPC
MINIMUM OF THE NEW PAY
SCALE
1 1800 26,000
2 1900 31,000
3 2000 33,000
4 2400 41,000
5 2800 46,000
6 4200 56,000
7 4600 66,000
8 4800 74,000
9 5400 78,000
10 5400 IN PB-3 88,000
11 6600 102,000
12 7600 120,000
13 8700 139,000
14 8900 148,000
15 10000 162,000
16 12000 193,000
17 75000-80000 202,000
18 80000 Fixed 213,000
19 90000 fixed 240,000
CONTD ...

21. Wages and service conditions of Garmin Dak Sevaks is to be
examined by 7th CPC itself. Detailed Memorandum will be
submitted by Postal Federations and GDS Unions.
Transport Allowance-
X classified City Other Places
Rs. 7500+ DA Rs. 3750+DA
The stipulation for TA that the Govt. employee should be on
duty in his headquarters for certain number of days during the
calender month should be removed.
CONTD ...

22. Deputation Allowance double the rates and should be paid
10% of the pay at same station and 20% of the pay at outside
station.
Classification of the post should be executive and non-
executive instead of present Group A.B.C.
Special Pay which was replaced with Special/Allowance by
4th CPC be bring back to curtail pay scales.
Scrap downsizing, outsourcing and contracting of govt. jobs.
Regularize casual labour and count their entire service after
first two year, as a regular service for pension and all other
benefits . They should not be thrown out by engaging
contractors workers.
CONTD ...

23. Housing Facility:-
o To achieve 70% houses in Delhi and 40% in all other town
to take lease accommodation and allot to the govt.
employees.
o Land and building acquired by it department may be used for
constructing houses for govt. Employees.
CONTD ...

24. House Building Allowance:-
o Simplify the procedure of HBA
o Entitle to purchase second and used houses
Common Category - Equal Pay for similar nature of work be
provided.
Compassionate appointment - remove ceiling of 5% and give
appointment within three months.
Traveling Allowance:-
Category A1, A class city Other City
Executive Rs. 5000 per day + DA Rs. 3500 per day+ DA
Non- Executive Rs. 4000 per day+ DA Rs. 2500 per day+ DA
CONTD ...

25. Patient Care Allowance to all Para-medical and staff working
in hospitals.
All allowances to be increased by three times.
Training:- Sufficient budget for in-service training.
Leave Entitlement-
o Increase Casual leave 08 to 12 days & 10 days to 15 days.
o Declare May Day as National Holiday.
o In case of Hospital Leave, remove the ceiling of maximum
24 months leave and 120 days full payment and remaining
half payment.
CONTD ...

26.  Income Tax:
o Allow 30% standard deduction to salaried employees.
o Exempt all allowances.
o Raise the ceiling limit as under:
• General- 2 lakh to 5 lakh.
• Sr. Citizen – 2.5 lakh to 7 lakh.
• Sr. Citizen above 80 years of age -5 lakh to 10 lakh.
o No income Tax on pension and family pension and Dearness
Relief.
CONTD ...

27. Effective grievance handling machinery for all non-
executive staff.
o Spot settlement
o Maintain schedule of three meetings in a year
o Department Council be reviewed at all levels
o Arbitration Award be implemented within six month, if not
be discussed with Staff Side before rejection for finding out
some modified form of agreement.
CONTD ...

28. Date of Increment -1st January and 1st July every year. In case
of employees retiring on 31st December and 30th June, they
should be given one increment on last ay of service, 31st
December and 30th June, and their retirements benefits should
be calculated by adding the same.
Appoint Arbitrator for shorting all pending anomalies of the
6th CPC.
General Insurance Active Insurance Scheme covering risk up
to Rs. 7,50,000/- to Non Executive & Rs. 3,50,000/- to
skilled staff by monthly contribution of Rs. 750/- & Rs. 350/-
respectively.
Point to point fixation of pay.
CONTD ...

29. Extra benefits to Women employees:
o 30% reservation for women
o Posting of husband and wife at same station
o One month special rest for chronic disease
o Conversion of Child Care Leave into Family Care Leave.
Gratuity:
o Existing ceiling of 16.5 months be removed and Gratuity be
paid @ half month salary for every year of qualifying
service.
o Remove ceiling limit of Rs. 10 lakh for Gratuity.
CONTD ...

30. THANK YOU!!!!!