Tuesday, February 12, 2013

a brief on Previous Pay Commissions

First Pay Commission

The first pay commission was constituted in 1946 and the government appointed Srinivasa Varadacharia as Chairman of this commission. 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 minimum basic pay for Class IV staff has been raised from Rs. 10/- to Rs. 30/- and for Class III from Rs. 35/- to Rs. 60/- per month.

The Commission had fixed Rs. 55/- as minimum wage (Rs. 30 plus Rs. 25 as Dearness Allowance). The recommendations were accepted and implemented in 1946.

Second Pay Commission

10 years after independence, the second pay commission was set up in August 1957. Shri Jaganath Das was appointed as Chairman of this Commission. The second pay commission finished its report within two years and submitted it to the Government. The recommendations of the second pay commission had a financial impact of Rs 396 million.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. The Commission revised the pay scales by merging 50% of the Dearness Allowance with basic Pay and it recommended Rs. 80 as the minimum remuneration(Basic Pay Rs. 70plus DA Rs.10/-) payable to a Government employee.

Third Pay Commission

Shri. Raghubir Dayal was appointed as Chairman of the third pay commission. It was set up in April 1970 and gave its report in March 1973. The commission took almost 3 years to submit the report,. The main demand of employees for a need based minimum wage as per the norms of 15th Indian Labour Conference was accepted in principle even though Commission evolved its own concept of need based wage.

The Third Pay Commission recommended Minimum remuneration of Rs. 185 per month.

By taking into the consideration of employee's views Government modified some of the recommendations of the Commission and minimum wage was raised from Rs. 185 per month to Rs. 196/- per month.


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 the period of four years. There from it was started maintaining huge gap between lowest grade and highest grade as for as pay is concerned.

There was a huge difference in basic pay between lowest grade and highest grade in IV pay commission pay scales. The basic pay of lowest grade was Rs.750, where as highest grade was Rs.9000. The pay of top most grade was 12 times higher than the pay of Group D employee. The Fourth CPC had recommended the government to constitute permanent machinery to undertake periodical review of pay and allowances of Central Government employees, but which got never implemented.


The Fifth Pay Commission was set up in 1994. The chairman of fifth pay commission was Justice S. Ratnavel Pandian. The commission gave its report in January 1997. Government accepted most of the recommendations and issued appropriate order in July 1997. The recommendations were implemented with effect from 1-1-1996. It recommended to reduce the number of pay scale from 51 to 34. It is noted that about 93% of the employees were in Group 3 and Group 4

The minimum Starting Pay has been revised from Rs. 750/ to Rs. 2550/-. In this, the pay of 5th CPC scale were about 3 times higher than the pay of IV CPC pay Scale. The pay scale starts from Rs.2550 and ends up with Rs.30000. The hike of 12 times between low level and top level was also maintained in V pay commission.


Initially the then government refused to set up sixth pay commission to review the pay and allowances of central government employees. The then finance minister told that there was no need to constitute next pay commission since 50 % dearness allowance was already merged with the basic pay. The employees had threatened to go on a nationwide strike if the government failed to set up 6th pay commission. In July 2006, the Cabinet approved setting up of the sixth pay commission. This commission has been set up under the Chairmanship of Justice B.N.Srikrishna with a timeframe of 18 months to submit the report. The cost of hikes in salaries is anticipated to be about Rs. 20,000 crore for a total of 3.5 million government employees. The commission submitted the Report to the Government on March, 24, 2008.

The Sixth Pay Commission mainly focused on removing ambiguity in respect of various pay scales and mainly focused on reducing number of pay scales .It recommended for removal of Group-D cadre.

The Fifth CPC had compressed many scales. The number of pay scales was reduced from 51 pay scales as on 31.12.1995 to 34 pay scales by the Fifth CPC. In many cases, this led to the promotion and feeder cadres being placed in an identical pay scale. Although Department of Expenditure issued orders that existence of the feeder and promotion posts in the same pay scale will not constitute an anomaly, however, these orders have consistently been rejected by the various courts of this country. The sixth pay Commission, therefore, decided to evolve a new system of pay scales that would effectively address most of the existing anomalies.

To remove stagnation, introduction of running pay bands for all posts in the Government presently existing in scales below that of Rs.26,000 (fixed).

The total number of grades reduced to 20 spread across four distinct running pay bands; one Apex Scale and another grade for the post of Cabinet Secretary/equivalent as against 35 standard pay scales existing earlier.


  1. sir can u please post the important recommendations of various committees also

  2. Sir about 5th pay commission..
    I have a small doubt..
    "The commission gave its report in January 1997 and govt.accepted most
    Of the recommendations and issued appropriate order in july 1997".
    Then how can the recommendations were implemented with effect from 1-1-1996 ?

  3. It is to note that Vth Central Pay Commission constituted in 1994 submitted its report in 1997. The new pay scales were however given with effect from 1.1.96 after protracted negotiations and improvements through negotiated settlement in September, 1997 in the wake of Strike Decision. The Commission in its report also focused on timely setting up of next commission in 2003 to formulate the new parameters of wages, salaries, perks and allowances so as to ensure connectivity and improvement. However, it did not happen and VIth CPC notification has been issued on 5th October, 2006.

    One should try to understand the fact that being a government servant one can witness a considerable pay hike at least twice or thrice of his/her entire service period. Because, other than promotion, only the pay commission recommendation will give them considerable pay hike. But it takes place once in ten years. Now a days a government employee can render service 20 or 30 years only due to non availability of employment opportunity in government service below the age of 25. So there is no need to be get annoyed by hearing the voice for seventh pay commission from central government employees. Because constituting next pay commission is for nothing but to review the salary of the govt. servants with the current economical condition of the country.

    How the pay of a govt. employee had been fixed at the beginning of the Independence India :

    Till now there are six pay commission had been constituted to review and recommend pay structure of central government employees.

    All the six pay commissions have taken many aspects into consideration to prescribe the pay structure for government servants.

    In the first pay commission the concept of ‘living wage’ was adopted.

    In second pay commission it had been reiterated that the pay structure and working condition to be crafted in a way so as to ensure the effective functioning of government mechanism.

    The third pay commission adopted the concept of ‘need based wage’

    The Fourth CPC had recommended the government to constitute permanent machinery to undertake periodical review of pay and allowances of Central Government employees, but which got never implemented.

    In Fifth pay commission all federations demanded that the pay scale should be at par with the public sector. But the pay commission didn’t accept this and told that the demand for parity with the Public Sector was however difficult to concede as it felt that the Job content and condition of service in the government and pulic sector not necessarily the same. There were essential differences between the two sectors.

    The Sixth Central Pay Commission, claimed that it had not only tried to evolve a proper pay package for the Government employees but also to make recommendations rationalizing the governmental structure with a view to improve the delivery mechanisms for providing better services to the common man

    How pay commission works ?

    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. So it is very much clear that Pay Determination is very complicated and sensitive task. Without any doubt every one accepts that this is very challenging task too. In order to determine the new pay structure the pay commission has to go through voluminous data consisting current economic condition, strength of the work force and working condition etc.