Social Scientist
Third Pay Commission Report
Author(s): Ruddar Datt
Source: Social Scientist, Vol. 1, No. 11 (Jun., 1973), pp. 49-55
Published by: Social Scientist
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NO TES
Third Pay Commission Report
THE long-awaited report of the Pay Commission has at last been submitted after three years in April 1973. It is also known that Rs 65 lakhs
have been spent in the preparation of this 1500-page document.
The Pay Commission Report has recommended several changes.
First, it is stated that the 500 pay scales as existing at present have been
telescoped into 80 scales. Secondly, it has been argued that the disparity
ratio between the minimum and the maximum pay scales (both post-tax)
has been reduced from 15.4 as on January 1, 1970 to 11.8. Thirdly, the
Commission has proposed an insurance cover of Rs 5000 for all employees
on the payment of Rs 5 per month. Fourthly, the Commission has
not raised the ceiling of Rs 3500 and thus, by raising the floor and middle
levels has tried to reduce disparities. Fifthly, the Commission while
making its proposals for the grant of dearness allowance has introduced an element of progression. Explaining this recommendation, the
Report mentions that the existing D A and the three interim reliefs have
been merged or absorbed in the new scale. The new scheme of D A
provided by the Commission is based on the consumer price index with
1960 as base year. The pay structure recommended is based on 200
points in the index. The new recommendation by the Commission provides a graduated system of D A with every eight point rise in this index
(corresponding to ten points in the old index). When the index touches
208, all employees drawing a revised pay upto Rs 900 a month will be
eligible for D A; when it rises to 16 points, all employees drawing upto
Rs 1600 a month would be covered and when the index rises by 24 points,
all employees drawing upto Rs 2250 a month will be covered. This
cycle will be repeated. The rate of D A upto Rs 300 a month will be
3.5 per cent of the pay subject to a minimum of Rs 7 and maximum of
Rs 10. Above Rs 300, it will be 2.5 per cent of the pay subject to a
minimum of Rs 10 and maximum of Rs 20. Sixthly, the Commission
has recommended Rs 185 as the minimum basic salary of a Central
Government employee.
Professor V R Pillai, a member of the Commission told the
Economic Times in this connection that "even though the Commission
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50
SOCIAL SCIENTIST
would have liked to recommend much higher scales fo
sections of employees, it would not have been possible for
ment to implement such a recommendation owing to its heavy
financial implications. The Commission had, therefore, done the next
best thing by reducing the gap between the higher and lower salaried
brackets of employees. The Commission had been guided by the socialist
policies of the Government" (Emphasis added).
The question that is most relevant here is: are the recommenda-
tions of the Commission based on the socialist policies ? It would be
relevant to examine the question in some depth. Outlining the philosophy, the Commission mentions that "inclusiveness, comprehensibility
and adequacy" are its guiding principles. But these words do not convey
much. In this connection, it would be pertinent to examine Table 1.
We have tabulated in Table 1 the scales of main categories of
employees uptoJunior Class I services. Since the total duration of the
nine pay scales included varies between 13 years to 20 years, we have
taken the median value of 15 years to determine the salary of a person
in a particular scale. When a particular scale ends after 13 or 14 years,
it has been assumed that the employee is placed in the next higher scale
and his salary has been worked out on that basis. For instance, assuming
that a peon is placed in the scale of a daftri after 13 years, two more
increments of the daftries, scale are added. This explains why the salary
of a peon after 15 years is determined at Rs 228. In order to
study the disparity ratio, it is not enough to take into account the differences in initial salary, but also to study how these differences tend to decrease
or increase over time. Consequently, a long term perspective would
imply the study of rate of increments in various scalts and their impact
on disparity ratio. A study of recommended pay scales by the Pay
Commission reveals that the percentage increase in basic salary over the
minimum initial salary of the scale rises as we proceed from the
lower to the higher scales of pay. It is 23.2 per cent in the case of peons,
28.9 per cent in the case of daftries, 30.0 per cent in the case of artisans
(semi-skilled workers), but is 65.0 per cent in the case of SAS accountants,
84.6 per cent in the case of Assistant Engineers, Superintendents and
Section Officers and 92.8 per cent in the case of All-India Services. As
a consequence, the index of disparity ratio which is 100:378 in the initial
salary between these scales will widen to 100:592 after 15 years. An
analysis of the Pay Commission's recommendations, therefore, reveals
an inverted concept of socialism being used by the Commission, because
by granting much higher rates of increment, the Commission widens
disparities over time. In a society which professes to move towards
socialism, these disparities should narrow down. Keeping this in view
the Commission should have provided for much higher rates ofincreme-
nets in the lower scales and it should have urged the government
to absorb the increases in their expenditures over a period of 15 years.
The Commission justifying the recommendation of Rs 185 as the
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NOTES
51
minimum salary for a class IV employee states : "Since a class IV employee at the beginning of his career is not usually expected to be responsible for the maintenance of three adult consumption units including
himself, and may not even be married, the Commission recommended a
minimum remuneration of Rs 185 per month for a whole-time government employee at the start of his career. At the end of five years' ser-
vice such an employee will automatically get the need-based wage of
Rs 196 per month according to the time scale the Commission has sug-
gested." A close examination of this logic will reveal the absurdity
hidden in it. Socio-economic studies reveal that age of marriage is low
in families with lower incomes and rises as incomes increase. Nearly all
those persons who join IAS are also unmarried in the first year of their
service. Similarly, most of the persons who join as LDCs, UDCs, engineers
and so on are also unmarried in the initial years of service and it is only
after a few years of service that they decide to enter the wedlock. In fact,
the poorer sections are handicapped in the sense that they cannot educate
their children and are, thus, forced to join lower jobs. To use this argument against the need for upgrading the salaries of the poor sections is,
to say the least, downright dishonesty. The Pay Commission is apologetic when it says that since the numbers involved are large in the lower
pay scales, the Commission found it difficult to recommend even a basic
salary of Rs 196 as the need-based minimum as determined by it. The
elitist approach in the recommendations of the Commission is evident
from the fact that it recommends increase in the maximum rate of
pension from Rs 675 to Rs 1000. It has also raised the ceiling limit of
gratuity from Rs 24,000 to 30,000. Both these recommendations are aimed
at ensuring, to the Indian elite, a comfortable life even after retirement.
Similarly, the Commission has recommended payment of House Rent
Allowance at 15 per cent of pay to a maximum of Rs 400 in A, Bi and B2
Class cities. In 'C' Class cities, this allowance is to be paid at 71 per
cent of pay subject to a maximum amount of Rs 200. In other words,
the Commission by raising the ceiling to Rs 400 has permitted persons in
the top income brackets also to become entitled to House Rent Allowance. The Commission has again raised the upper pay limit for payment
of Children's Education Allowance and reimbursement of tuition fee to
all employees drawing Rs 1200 per month. In other words, the Commission has in its proposals covered the persons in higher pay ranges.
Such an extension of concession in a poor country to better-off sections is
not in conformity with the priorities that a society programming for
socialism should have.
Another example of the elitist approach of the Commission is provided by quietly sanctioning perquisites to the top officials in the army.
The Commission states: "While no changes have been recommended in
the scales for the Major General, Lt General and General, the Commission has recommended that the existing concession of recovery of rent
for unfurnished accommodation and concessional rates of recovery of
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Category
LI
_-
.r
TABLE 1
Incr
Salar
Mini
The
Basic
Basic
Years
Salary
Initial
Minimum
After
Year
After 15
190
185
260
245
228
il-
200
358
--?-.L?.e,
260
Salary
Perce
BASIS OF PAY SCALES RECOMMENDED BY TiIRD PAY COMM
MINIMUM AND MAXIMUM SALARIES FOR VARIOUS CATEGORIES AFTER
Scale of Pay
Recommended
Rs 185-2-193-3-220
1 Peons, unskilled workers
gangmen (railway)
Rs 190-3-208-4-240
= 20 Years
400
Rs 260-6-326-8-390-10-
19 Years
280
Rs 200-3-212-4-240-5-
= 14 Years
= 13 Years
2 Daftries, jamadars, cooks
pointsman B (Railway)
leverman grade II,
3 Artisans (semi - skilled)
4 Skilled workers, lower
division clerks, staff car
drivers, ticket collectors
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5 Upper division clerks,
680
- 19 Years
560
Rs 330-10-380-12-500-15- 330 500 51
qualified pharmacists and
compounders, assistant
station masters, higher
secondary-trained primary
school teachers, librarians
with diploma in library
Rs 425-15-560-20-700-25
425
6 Assistants and
stenographers
-800
income tax inspectors,
-- 20 Years
inspectors of Central
825
science
500
1200
H S Schools.
- 18 Years
(Central secretariat) head
masters of high schools - 15 Years
and vice-principals of
Class II, section officers 880-40-1200
tendent Central tax officers Rs 650-30-740-35-
8 Assistant Engineers, superin-
7 S A S Accountants
excise etc.
650
1350
Rs 500-20-700-25-900
700
9 Junior Class I posts in All
India Services, scientific, Rs 700-40-1100-50-1300
engineering and other = 14 Years
Class I Central services.
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SOCIAL SCIENTIST
54
water and electricity charges should be extended to officers of the rank
of Major General and above also. Similarly the Kit Maintenance Allowance of Rs 50 per month has also been extended to officers of the rank of
Major General and above."
While expounding its philosophy, the Commission states that the
existing pay structure is heavily weighted in favour of administrators,
and, therefore, the Commission while recommending the scales have kept
this principle in view : that all service people (technical and scientific)
who entered government service should be able to reach the top without
having to shift as administrators. This, the Commission observes, is
particularly important in the case of specialists. For example, doctors,
surgeons or technical experts or scientists need not become either directors-
general or deputy directors-general if they want to reach the highest
scales. ft has been observed that by becoming administrators, they are lost
to the profession. This recommendation of the Commission is basically
sound, but carrying a legacy of the past philosophy, it still recommended
the highest pay scales for administrators, specially those who join IAS.
The Education Commission (1964-66) headed by Dr D S Kothari while
making a strong plea for improving the salary scales of university
teachers stated: "At the University stage, the remuneration of teachers
should be broadly comparable to that of senior services of the government so that a fair proportion of the talent in the country is attracted to
to the profession of teaching and research. What is important here is
that the salary of a Vice-chancellor should be about the same as that of
a secretary to the Union Government, the maximum salary of a University professor should be the same as the maximum in the senior scale of
the IAS, and for outstanding professors, higher salaries comparable to
the supertime scales of pay of the IAS should be available" (Report of the
Education Commission 1964-66, p 50). To allocate talent to the various
cadres of services where equally qualified persons are needed, it would be
better to provide the same scales of pay and then leave the choice to the
individuals on the basis of their aptitudes and predilections. Many
good scholars who could have contributed much more in teaching or
research are brought away by the All-India services by the lure of higher
pay and perquisites and, thus, they become cogs in the administrative
machinery. The Pay Commission should have adopted a better philosophy of distribution of talent rather than maintaining the colonial supremacy of the IAS. Following the Commission, the state governments will
also recommend higher pay scales for their administrative services. Will
it not perpetuate a social structure which puts the administrator at a
higher pedestal than his counterpart who is equally (and in some ways
even more) qualified but who opted for a different profession ?
Two more questions are relevant from the point of view of moving
towards a more progressive pay structure. First, should there be a federal
or integrated pay commission for the country as a whole? Secondly,
should there be a co-ordinated approach towards wages in public and
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NOTES
55
private sectors ? The Pay Commission should be structured on a federal
basis and its recommendations be made applicable to all the states and
union territories in a uniform manner. A large number of unions of
employees in different sectors agitate for parity with their counterparts in
the Central Government in matters of scales of pay, dearness allowance
and other conditions of employment. The recent strike of school teachers
in Haryana or of college teachers in various parts of the country for the
acceptance of UGC scales are cases in point. Whenever the Central
Government improves the pay scales of its employees, it sets in motion a
chain reaction all over the country. It is, therefore, very desirable that a
federal pay commission should review the pay structure of both state and
Central Government employees and recommend uniform scales all
over India.
The Pay Commission has deliberately rejected the principle of pay
co-ordination between private and public sectors in order not to start a
competitive wage escalation. However, it hopes the government will
take steps to implement a broad-based income and wage policy for the
country. The Commission has accepted the view that the wage policy
enunciated for 4 million Central Government employees has to be extended to the private sector as well, but no concrete measures have been
suggested for the purpose. A much bigger number of workers seek
employment in the private sector, and, in this sector the need for getting
the scales implemented is paramount. By the very fact that the Commission's proposals will be implemented in the public sector, conditions
of disequilibrium are bound to be created in the labour market and the
tendency of labour to shift from private to public sectors will grow. But
in a labour-surplus economy where a high degree of unemployment prevails, the private sector does not find much difficulty in recruiting
from the "reserve army" of unemployed. It is the existence of this
situation that makes the problem more difficult of solution.
RUDDAR DATT
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