Historical Perspective on Pay Structure of Central Government Employees

Historical Perspective on Pay Structure of Central Government Employees

The thrust of all the previous Pay Commissions has been to propose an improvement in the pay structure by way of ‘simplification and rationalisation.’ The most visible results of this exercise are evident in terms of reduction in number of pay scales as well as the compression ratio. 

Traditionally, compression ratio has been taken as a ratio of maximum salary drawn by the Secretary to Government of India to minimum salary drawn by the lowest functionary in the government. Table 1 below brings out the trend in pay structure in the government of India over the years:

It can be seen from the table above that successive Pay Commissions have consciously tried to reduce the number of pay scales even though they tended to increase during the intervening period between any two Pay Commissions. There were, however, no significant changes in the pay structure per se until the IV CPC, when the concept of running pay scales was introduced in a limited way in respect of Defence forces. For others, individual pay scales continued till the V CPC. 

It was the VI CPC which recommended running pay bands for both Civilians as well as Defence forces. This was coupled with the introduction of the concept of Grade Pay as a level differentiator. Another new feature was the calculation of the annual increment on percentage basis. Prior to VI CPC, the increment was a flat sum, depending on the pay scale. 

The effort at compression of levels was carried forward by the VI CPC, which reduced the existing 35 levels to 19. Another radical measure was the doing away with ‘GroupD’ as a category and placement of ‘Group-D’ personnel in ‘Group-C’ after appropriate training whenever necessary. Hence, it can be seen that the simplification process set in motion by previous Pay Commissions.