Government of India have set up six pay commissions to review and recommend wage structure for all civil and military divisions including Railways.
These Pay commissions examine various issues such as pay and allowances, retirement benefits, conditions of service. promotion policies. Etc, and submit recommendations.
As Fifth Pay Commission observed “ Pay Commission is a peculiarly Indian institution”.
Pay scales existed before the advent of Pay Commissions was the 1934 Scales. First Commission scales(known as ‘Prescribed Scales”) replaced the 1934 Scales.
First Pay Commission:
The first pay commission was constituted in 1946 with Srinivasa Varadacharia as Chairman.
The commission’s recommendations were based upon the idea of “living wages” to the employees.
The commission simplified the wage structure of Railway employees and number of scales were reduced to 30. 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 has 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:
The second pay commission was set up in August 1957 with Justice Jagannadha Das as Chairman.
The Commission gave its report after two years.
The commission stated that the pay structure and the working conditions of the government employee should be designed 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. 70 plus DA Rs.10/-) payable to a Government employee.
The commission rationalized the pay structures by reducing further the number of scales.
Third Pay Commission:.
The third pay commission set up in April 1970 with Justice Raghubir Dayal as chairman.
The Commission gave its report in March 1973.
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. Commission recommended Minimum remuneration of Rs. 185 per month.
The third pay commission added three concepts of inclusiveness, comprehensibility, and adequacy for pay structure to be sound in nature. By taking the view 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. Pay fixation formula has also been made more liberal.
Fourth Pay Commission:
Constituted in June 1983, chairman of fourth pay commission was P N Singhal.
Its report was given in three phases within four years and its recommendations were implemented with effect from 1-1-1986. Rs. 750/- was the minimum pay recommended by the Commission.
The Fourth CPC had recommended that there should be a permanent machinery to undertake periodical review of pay and allowances of Central Government employees which got never implemented.
Fifth Pay Commission:
The Fifth Pay Commission was set up in 1994 with Justice S. Ratnavel Pandian as Chairman.
The commission gave its report in January 1997. Government accepted most of the recommendations and announced the package in July 1997.
The recommendations were implemented with effect from 1-1-1996. The minimum Starting Pay has been revised from Rs. 750/ to Rs. 2550/- It recommended to reduce the number of pay scale from 51 to 34. One of its recommendations was to slash government work force by about 30%. The Commission also suggested that the grant of salary hikes to employees be linked to issues of downsizing government, efficiency and administrative reforms.
Sixth Pay Commission:
In July 2006, the sixth pay commission has been set up under Justice B.N.Srikrishna as Chairman.
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. Commission proposed minimum salary at the entry level of PB-1 pay band to be Rs.6660/- (Rs.4860 as pay in the pay band plus Rs.1800 as grade pay) and maximum salary at the level of Secretary/equivalent as Rs.80000. The minimum: maximum ratio is 1:12
Seventh Pay Commission Announced in September 2013.