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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