History of Chairpersons of Pay Commissions and Their Contributions to Government Pay Revisions |

The Pay Commissions in India have played a crucial role in revising the pay structures for government employees. These commissions are constituted periodically to assess and revise the pay and pension structures for central government employees. They are tasked with suggesting revisions in the pay scale, allowances, and other benefits in accordance with economic changes and national development needs. Each Pay Commission has had its chairperson, who has led the commission through its deliberations and presented recommendations that shaped the remuneration system in the country. This article takes a deep dive into the history of the Pay Commissions, their chairpersons, and the key contributions they made.

1. First Pay Commission (1946)

Chairperson: Srinivasa Varadachariar

Background: The First Pay Commission was set up in 1946, shortly after India gained independence. The primary objective was to establish a fair and standardized pay structure for the newly independent nation. The chairperson, Srinivasa Varadachariar, was a distinguished lawyer and former judge of the Madras High Court. His leadership aimed at simplifying the pay scale and ensuring that it matched the economic challenges faced by the country in the post-independence period.

Key Recommendations:

• Simplification of Pay Scales: The pay scales were streamlined to make the administration simpler and more efficient.
• Living Wage Concept: The commission recommended a “living wage” to ensure that employees could meet basic living expenses.

Impact: The recommendations laid the foundation for a unified pay structure, though the impact was more limited in terms of financial adjustments. The implementation of these recommendations began in 1947.

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2. Second Pay Commission (1957)

Chairperson: Jagannath Das

Background: The Second Pay Commission was established in 1957 under the chairmanship of Jagannath Das, a retired judge of the Orissa High Court. This commission came at a time when India was focused on economic reconstruction, industrialization, and poverty alleviation. The primary aim was to adapt the pay structure to reflect the socio-economic changes of the time.

Key Recommendations:

• Merged Dearness Allowance (DA): The Second Pay Commission recommended that the Dearness Allowance (DA) be merged with the basic pay, ensuring that the purchasing power of employees was safeguarded.
• Revised Pay Structure: A new pay structure was proposed to accommodate the growing complexity of government services.

Impact:

• The recommendations led to the revision of salaries and allowances for government employees. The financial impact was approximately ₹39.6 crore.

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3. Third Pay Commission (1970)

Chairperson: Justice Raghubar Dayal

Background: The Third Pay Commission was constituted in 1970 under the leadership of Justice Raghubar Dayal, a retired judge of the Supreme Court of India. The commission was tasked with addressing the increasing cost of living and providing a pay structure that ensured fairness for all government employees.

Key Recommendations:

• Need-Based Minimum Wage: The commission recommended a need-based minimum wage for employees, which aimed to ensure that government employees could afford the basic necessities of life.
• Systematic Pay Scales: The pay scales were further refined to create more systematic and transparent structures.

Impact: The Third Pay Commission’s work was significant as it introduced the concept of a minimum wage, which would become a critical part of future commissions. However, no clear financial impact was documented in the public domain.

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4. Fourth Pay Commission (1983)

Chairperson: P.N. Singhal

Background: The Fourth Pay Commission, chaired by P.N. Singhal, a former bureaucrat, was constituted in 1983. During this period, India was undergoing economic reforms and adjusting to new economic realities, including a more complex bureaucracy and growing inflation.

Key Recommendations:

• Rank Pay: This commission introduced the concept of “Rank Pay,” where officers of various ranks were given distinct pay scales.
• Three-Phase Report: The commission’s report was presented in three phases to deal with the complexity of the government’s pay structure.

Impact: The Fourth Pay Commission’s report had significant implications for the armed forces and the police services due to the rank pay structure. The financial impact of these recommendations was ₹1282 crore.

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Chairperson: Justice S. Ratnavel Pandian

5. Fifth Pay Commission (1994)

Background: The Fifth Pay Commission was set up in 1994 under the chairmanship of Justice S. Ratnavel Pandian, a former judge of the Supreme Court of India. This commission came at a time when the Indian economy was liberalizing, and the government needed to rethink its fiscal policies.

Key Recommendations:

• Reduced Scales to 34: The commission reduced the number of pay scales to 34, simplifying the structure.
• Modernization: This commission was particularly focused on modernizing the salary structure to make it more rational and reflective of changing economic conditions.

Impact: Though the implementation was spread over several years, the Fifth Pay Commission’s recommendations were considered an important step in modernizing government pay structures. The financial impact, however, has not been specified publicly.

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6. Sixth Pay Commission (2006)

Chairperson: Justice B.N. Srikrishna

Background: The Sixth Pay Commission, established in 2006, was chaired by Justice B.N. Srikrishna, a retired judge of the Supreme Court of India. The commission came at a time of substantial economic growth in India, and its recommendations were aimed at bridging the salary gap between the private and public sectors.

Key Recommendations:

• Running Pay Bands: One of the key innovations of the Sixth Pay Commission was the introduction of running pay bands, which aimed to provide a continuous and progressive salary growth for government employees.
• Military Service Pay (MSP): The introduction of MSP for defense personnel to recognize their contribution was a significant move.
• Abolition of Group-D Posts: The commission recommended the abolition of Group-D posts, which were often seen as low-level, administrative jobs.

Impact: The Sixth Pay Commission’s recommendations were implemented in 2008, leading to a rise in government employee salaries. The estimated financial impact was approximately ₹12,561 crore annually.

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7. Seventh Pay Commission (2014)

Chairperson: Justice A.K. Mathur

Background: The Seventh Pay Commission was constituted in 2014 under the chairmanship of Justice A.K. Mathur, a former judge of the Supreme Court. The commission’s formation was part of a broader initiative by the government to streamline the salary structure and align it with modern economic realities.

Key Recommendations:

• 23.55% Salary Hike: The commission recommended a 23.55% hike in the pay and allowances of government employees.
• New Pay Matrix: A completely new pay matrix was introduced, replacing the old pay bands, which aimed to streamline the promotion and pay revision process.
• Improved Allowances: The commission revised various allowances like House Rent Allowance (HRA), Dearness Allowance (DA), and travel allowances.

Impact: The Seventh Pay Commission had a significant financial impact, though the exact figures have not been officially published. The implementation began in 2016, bringing a substantial increase in government salaries.

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8. Eighth Pay Commission (2025)

Chairperson: To Be Announced

Background: The Eighth Pay Commission is set to be constituted in 2025. The chairperson of the commission is yet to be announced, but the commission’s formation is expected to coincide with the upcoming changes in the economic and political landscape of India.

Key Expectations:

• Expected Salary Hike: Predictions suggest a salary hike of 20-35% for government employees.
• Addressing Remote Work: There could be recommendations for remote work allowances as the nature of employment continues to evolve.

Impact: The full details of the financial impact and key recommendations will be clear only once the commission is constituted and the report is released. The expected implementation year is 2026.

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Conclusion: The Legacy of the Pay Commissions

Each Pay Commission in India has contributed significantly to the well-being of government employees. From introducing rank pay and reducing pay scales to the recent introduction of pay bands and the promise of a more inclusive salary structure, the Pay Commissions have been a key component in shaping the economic landscape for government workers. The chairpersons of these commissions have been pivotal in guiding these reforms, and their recommendations have had lasting impacts on the lives of millions of public servants in India.

The evolution of the Pay Commissions reflects the changing needs of the Indian economy and society. As we approach the 8th Pay Commission, it will be interesting to see how it addresses the challenges of a modern workforce, including the impact of digital transformation, remote working, and evolving economic conditions. The role of the chairperson and the commission, in general, remains critical in determining the future of government employees and their families.