By:LekyaThejusviniMuthumanikandan K

Sixth Pay Commission

What is Pay Commission?

Pay Commission is set up intermittently by government of India, and gives its recommendation to regarding changes in salary structure of its employees.

A Pay Commission is a panel of members of the Union Cabinet of India for raising the salaries of government employees. Since India's Independence, six pay commissions have been set up on a regular basis to review and make recommendations on the work and pay structure of all civil and military divisions of the Government of India 

The Govt. revises the pay of the Govt. employees, every after ten years

First Pay Commission The first pay commission was established on May, 1946 and its submitted its

report on May, 1947 to the interim government of India

Second Pay Commission 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 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 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, and the chairman of fourth pay commission was P N Singhal.

Fifth Pay Commission 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 Other recommendations of the Fifth pay commission Criticisms of World Bank on fifth pay commission

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 shot 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.

Other recommendations of the Fifth pay commission.

One of its recommendations was to slash government work force by about 30%. It also recommended to reduce the number of pay scale from 51 to 34 and to not recruit to about 3,50,000 vacant position in the government. None of these recommendations were implemented.

Crit icisms 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

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 additional burden of Rs. 20,000 crore for a total of 80 Lakhs government employees as per media speculation on the 6th Pay Commission. Report of Sixth Central Pay Commission was submitted to Finance Minister P. Chidambaram on 24 March 2008. The cabinet has approved sixth pay commission recommendations with some modifications on 14 August. Revised pay will be implemented with effect from 01.01.2006 and allowances will be paid with effect from 01.09.2008. The recommendations related to the report were to be implemented prospectively. The report led to a 6% increase in dearness allowance for central government employees from 16% to 22%. 

Salient features of pay structure

Minimum salary at PB-1 is Rs.4860+1800(GP) = Rs.6660/- (considering 3 units) and maximum for cabinet secretary/equivalent is Rs.90,000/- Pm which is 1:13.5 (increased from 1:11.76 in 5th CPC ).

Annual increments to be paid at 2.5% of the total pay in the pay band and the corresponding grade pay. The date of annual increments should be first of July and employees completing six months and above in the scale are eligible.

Another form of variable increment to Group`A’ officers (PB-2 & PB-3) wherein 20% of high performers will be given increment at higher rate of 3.5%.

At the time of promotion from one post to the other , the grade pay attached to the posts in different levels within the same running band to change. One increment to be given at the time of promotion.

Allowances will be based on grade pay and the allowances will increase by 25% when the DA

exceeds 50%.

Allowances House rent allowance The rates of HRA are as under:-

Revised city classification on population criteria

Rates of HRA as a %age of pay + GP + MSP + NPA

50 lacs & above 30%

5 lacs and below 50 lacs

20%

Below 5 lacs 10%

Allowances Transportation allowance

CCA is abolished and merged with transportation allowance whose rates per month are as under:-

Employees drawing grade pay of Rs. A1 & A class cities Other cities

5200/- and above including apex grade & cabinet secretary grade

Rs.3200/- + DA thereon

Rs.1600/- + DA thereon

Rs.4200/- to Rs.4800/- Rs.1600/- + DA thereon

Rs.800/- + DA thereon

Below Rs.4200/- Rs.400/- + DA thereon

Rs.300/- + DA thereon

• The restrictions of 1Km distance from place of residence to office are lifted.

• For physically handicapped the rates are double and in no case less than Rs.1000+DA thereon.

• Officers in PB-4 who are eligible for staff car can draw transportation allowance of Rs.7000+DA thereon provided they give up their official vehicle for travel between residence and office.

Allowances

Travel entitlement while on tour/transfer The travel entitlement while on tour or transfer is as under:-

Employees drawing grade pay of

Entitlement

Rs.9000 & above `J’ class by air/AC first class in train

Rs.6600-/ to Rs.8400/- `Y’ class by air/AC first class in train

Rs.5400/- to 6500/- `Y’ class by air/AC II tier in train

Rs.4200/- to Rs.4800/- AC II tier in train

Less than Rs.4200/- First class/AC III tier/ AC chair car by train

Allowances Educational allowance

Educational allowance :- Max of Rs.1000/- Pm per child up to two children

Hostel subsidy :- Max of Rs.3000/- pm per child up to two children

Risk allowance

For those engaged in risky occupation, free medical & life insurance will be as under:-

Grade Insurance

PB-1 Rs.5.00 lacs

PB-2 Rs.7.00 lacs

PB-3 Rs.10.00 lacs

Over time

The fifth pay commission had recommended abolition of OT to all category of staff except staff car driver, operational staff and industrial employees and all other staff except supervisory staff should be given compensatory rest instead. This was not accepted by the government & status quo was maintained.

Now the sixth pay commission has also recommended abolition of OT to all categories of staff except operational & industrial staff who are governed by statutory provisions.

Group insurance

Rate of monthly subscription and insurance covered shall be as under:-

Group Monthly subscription Insurance cover

A Rs.720/- Rs.7.20 lacs

B Rs.360/- Rs.3.60 lacs

C Rs.180/- Rs.1.80 lacs

D Rs.180/- Rs.1.80 lacs

HOLIDAYS

Govt offices to be closed only on 3 national holidays (26/1, 15/8, 2/10)

Restricted holidays to be increased to 8.

HOD has powers to declare office closed to a maximum of two restricted holidays in a year on local considerations to be decided at beginning of the year in consultation with staff side.

CL, LAP & HLAP remains unchanged.

12 CLs for physically challenged.

HLAP now allowed to Railway school staff

FACILITIES FOR WOMEN EMPLOYEES

Staggered working hours giving flexibility to work early or late. Under this scheme 11.00 Hrs to 16.00Hrs will be the core working hours during which all women employees should be present. They will have the option of either coming either up to 1 ½ Hrs earlier or leaving up to two hours late depending upon the actual time they have clocked in. The time may be adjusted if office have different working hours.

Child care leave up to 2 years ( 730 days) for taking care up to 2 children at the time of need like examination, sickness etc. Child care leave should also be allowed for the third year as leave not due. However no child care leave can be given once the child is more than 18 years old.

Maternity leave to be increased from 135 days to 180 days up to two children. Further leave up to two year period in continuation can be availed instead of existing one year period.

Service conduct rules for protection of women

50% of transfer grant on transfer if transfer of either of the spouse takes place within six months but not lesser than 60 days

FACILITIES FOR HANDICAPPED

No of casual leaves to be 12 instead of 8.

Aids and appliances like hearing aids, Dictaphones, Braille writing equipments CD player, tape recorder, low vision aids and other earing equipments to be provided free of cost to discharge official duties better.

Barrier free entries at all places

Higher subsidy (4%) for loans

Liberal flexi hours of employment.

Special allowance for child care of Rs.1000/- per month for women with disabilities payable from the time of child birth up to two years and for two children.

Transport allowance at double the normal rates subject to minimum of Rs.1000/- per month.

HEALTH Health insurance scheme to employers and pensioners on voluntary basis with contribution of 30%,

25% & 20% by Gr`A’, `B’ & `C’ employees with government paying the remainder. The arrangement to be reviewed periodically.

Health insurance scheme to be made compulsory for new employees who will be joining service after introduction of the scheme. Similarly new retirees after introduction of the scheme would be covered under this scheme. The new recruits and these retirees will not be provided with CGHS/CS(MA) facilities, but will be provided an appropriate amount till insurance scheme for OPD facilities are devised.

RETIREMENT BENEFITS

Pension & family pension to be increased to pensioners as under:-

On attaining age of Additional quantum of pension

80 years 20% of basic pension

85 years 30% of basic pension

90 years 40% of basic pension

95 years 50% of basic pension

100 years 100% of basic pension

RETIREMENT BENEFITS

Maximum pecuniary limit for gratuity to be increased from limit of Rs.3.50 lacs to Rs.10.00 lacs

No change in the maximum no of earn leave that can be accumulated ie 300 days. However the no of earn leave en cashed while in service to be excluded from the overall ceiling of encashment of 300 days earn leave at the time of retirement.

Both earned leave & half pay to be considered for encashment of leave subject to overall ceiling of 300 days. Half pay leave will be en cashable at the rate equal to half the amount of leave salary payable during earned leave without any reduction made on the amount of pension payable. To make up short fall of earned leave, no commutation of half pay leave will be permissible.

For 100% disability attendant allowance to be provided on same lines being provided to defense personals.

Rates of excreta to be doubled and raised to Rs.10 lacs for death on accidents in course of performance of duty attributable to acts of violence of terrorists, antisocial elements etc.. And Rs.15 lacs in case of enemy action in international war or skirmishes on borders, militant acts, extremists in border posts, extreme climate conditions at high altitudes, in acessable border posts etc..