• Home
  • Pay Calculator
  • Pay Matrix
  • DA Table
  • DoPT
  • 7th CPC News

CENTRAL GOVERNMENT EMPLOYEES NEWS

7th PAY COMMISSION, 7th CPC NEWS, 7th CENTRAL PAY COMMISSION, 7th PAY SCALE, 7th PROJECTED PAY SCALE, 7th EXPECTED PAY SCALE, EXPECTED DA, DOPT ORDERS

  • Retirement Age
  • CSD
  • CGHS
  • Holidays
  • Finmin
  • AICPIN
  • Holiday Home
You are here: Home / 7th CPC Dopt Orders / 7th CENTRAL PAY COMMISSION – Principles of Wage Determination for Central Government Employees

Expected DA Calculator from January 2021 (Updated Nov 2020)
Central Government Pay Scale Calculator
7th CPC Pay Fixation on Promotion MACP Calculator

Retirement Date Calculator 2020
Leave Encashment Calculator 2020
Commutation of Pension Calculator 2020

7th Pay Matrix Table for Central Government Employees
7th Pay Commission Salary Calculator Updated 2021
7th Pay Commission Calculator for Teachers

LTC Cash Voucher Scheme Calculator 2020

7th CENTRAL PAY COMMISSION – Principles of Wage Determination for Central Government Employees

June 25, 2014 admin 1 Comment

7th CENTRAL PAY COMMISSION – Principles of Wage Determination for Central Government Employees

The First Pay Commission, which was set up on 1946, submitted their report on 30th April, 1947. Dwelling at length, the principle that must govern the determination of salary in civil service, the Commission pointed out the difficulty in adopting the Islington Commission‟s suggestions which had been the basis in determination of pay of civil servants in U.K. and the Colonial India. They quoted the criticism, perhaps rightly made, on the dictum of Islington Commission as Ricardian in spirit and based on Capitalistic outlook of 19th century. In sum and substance, the Islington Commission had advocated the law of supply and demand with certain modification, when they said that:

“Govt. should pay so much and so much only to its employees as was necessary to obtain recruits of the right stamp and to maintain them in such degree and comfort and dignity as would shield them from temptation and keep them efficient.”

The First Pay Commission, though agreed with the criticism took the stand that the law of supply and demand must not be totally ignored. The Commission concluded (by elaborately dealing with the concept of living wage) that the test formulated by the Islington Commission is to be liberally interpreted and to be qualified by the condition that in no case should a man‟s pay be less than the “living wage”.

The Second Pay Commission examined various contentions raised before them, viz., supply and demand for labour; Government being treated as a model
employer; combining social and economic considerations, fair comparison, factoring the per capita national income, the report of the fair wage committee, etc. In depth the Commission considered the merits and demerits of each of the above principles.

Some of their comments are relevant in the reappraisal of the principles, which the 7th CPC has been asked to undertake by the Government.

On the concept of fair comparison, the 2nd CPC commented that:
www.ncjcmstaffside.com “if the emoluments in the public service taken with the other conditions bear fair comparison with those persons with similar qualifications, duties and responsibilities in outside employment, the Government should, a priori, be certain of getting recruits of the required standard and of keeping them contented and efficient. But the converse of this, namely the government cannot get recruits of the requisite standards
and keep them contented unless they pay rates of remuneration comparable to those outside, may not be true.

At the lowest level on the other hand the outside rates maybe too low for maintaining the efficiency of an employee, even though with so much unemployment and underemployment in the country the Government may have no difficulty in recruitment so long as they pay the central rate. (Para 8 Page 19 2nd CPC)

We may explain that comparison, if instituted, would have to be limited to rates of remuneration and conditions of employment in undertaking known to be giving fair wages; to be following sound employment and management practices and to be generally maintaining good relations with their employees. In other words, the comparison would be with good employers. ( Para 22 Page 26 Chapter IV)

They dismissed the idea of Government being a model employer if that is conceived to make the Government to pay higher wages and salaries than other good employers for comparable work. The Commission feared that the Government acting as a model employer in the above mentioned manner, would be exposed to a well founded criticism of extravagance. (Para 12 Page 20-21 Chapter IV)

They concluded that “while the model employer” principle in the sense explained in Para II is not a sound one, the social principles and standards which government have laid down for or commented to employers generally should be taken into account in determining the emoluments and conditions of service of central government employees.

They reframed from adopting fair comparison with outside rates as a principle suitable for free and detailed application, but recognized it as
one of the important factors to be taken into account. They opined that comparison with outside rates should be used as an aid and corrective.

In the ultimate conclusion of the discussion of various principles for wage determination, the 2nd Pay Commission stated that:
www.ncjcmstaffside.com“the social and ethical as well as economic consideration are relevant to the determination of the minimum and maximum
salaries, that the internal relativities should be determined with care and should be sound and fair, and that the whole structure of the remuneration and conditions of salaries should be fair to the community as well as to the employees. We have in fact formulated not one but a number of principles. The principles supplement one another: but there is no fixed order in which they are to be applied. There may, in fact, be cases in which the principles, if applied independently would lead to divergent conclusions, but they are not intended to be so applied. We look at the principles essentially as a statement of the basic consideration which have to be taken into account together and harmonised to the utmost extent possible. Further the principles are to be applied against the background – among other circumstances – of the economic conditions in the country and the implications and requirements of developmental planning”.

The 3rd CPC dealt in detail the various principles of pay determination. They made a critical analysis of each of the principles propounded by the earlier Commissions.

Some of the views and principles noted by the 3rd CPC were:

a) Characteristic of a sound pay structure
b) Supply and demand consideration
c) Equal pay for equal work
d) Fair comparison
e) Job evaluation
f) Wages and productivity
g) The concept of model employer.

The 3rd CPC gave primacy to the discussion on the major characteristic of a sound pay structure. According to them, inclusiveness, comprehensibility and adequacy are the pre-requisites of a sound pay structure. By inclusiveness, they meant that the pay structure and career adopted for the civil service proper should also be adopted by autonomous, quasi-governmental organizations. They wanted the pay scale proper should provide a free and comprehensible picture of the total remuneration given to the government employees. They also advocated that the remuneration must be adequate internally and externally. Due cognizance of the individuals attributes and the need to protect a reasonable standard of living were to be taken in
to account while determining remuneration. On adequacy of the remuneration they commented that “while it is not argued that the payment of high salaries by itself is a guarantee for the honesty and integrity of the public service, it can be confidently stated that payment of a salary which does not satisfy the minimum reasonable needs of a government servant is a direct invitation to corruption”.

After examining the various principles, they concluded that while disproportionate importance should not be attached to private salaries, it was nevertheless necessary to take note of the rate of pay and other conditions of service prevalent outside government as a corrective. In particular, they pointed out that since the supply of unskilled labour was abundant, the wages to be paid to such workers should be related to essential psychological needs rather than condition of supply and demand.

They, as was the case with the 1st and 2nd CPC rejected the principles that Government should act like a model employer. They found if advisable to bear in mind several principles and conditions while determining the pay structure. They adopted the concept of minimum wage to determine the pay of the lowest level of employees with certain modifications of the Dr. Aykhroyd formula. In respect of organized Group A services, their primary consideration was to ensure that the terms offered should be attractive enough to enable a person with calibre to make a life time career in the Government.

The terms of reference of 4th CPC had not stipulated that commission to go into the principles of pay determination. The government must have thought that the three earlier commissions, having dwelt upon the issue at length and depth, 4th CPC need not be saddled with a repetitive task. However, the 4th CPC took upon itself to effect a re-appraisal of the principles in view of the 42nd amendment effected to the Constitution of India whereby the preamble was amended to incorporate the words “socialist secular” in between sovereign and democratic republic. They stated that the amendment had made a visible change in the complexion of the constitution.

They noted that the said amendment was to express a concern for a social welfare of the oppressed, the unfortunate and the disadvantaged. Theyquoted the Supreme Court to state that the objective was to strive to set up a vibrant „‟throbbing socialist welfare society” in place of a “wholly feudal exploited” society.

They went on to analyse of the meaning and purport of the concept of “Living Wage” “Directive principles of state policy” fair wage commission‟s recommendations concept of „‟model employer” the report of the Megaw Committee which inquired in to requirements of civil service of U.K, performance related pay, etc. Some of their observations being relevant are reproduced:

“Principal object in enacting the directive principles appears to have been to set standards of achievements before the legislature and the executive, the local and other authorities”.

“Concept of a living wage is not a static concept, it is expanding and the number of constituents and their respective contents are bound to expand and widen with the development and growth of economy”.

In para 7.29 the 4thCPC stated that “Pay determination is a mixture of the effort to settle the principles as well as the system on which it is based and implemented. The need for it arises for the simple reason that without it the normal rule of supply and demand would operate harshly in a developing economy like ours – particularly as the central government is virtually in the position of a monopolist employer in several fields, in an overflowing labour market. If the inexorable law of supply and demand were to operate, the employer, in a country like ours, would give no more than
starvation wage to as many as possible”.

The 4th CPC justified the periodical wage revision to take note of changes that may have taken place in the relevant facts and circumstances bearing on pay scales but also to rectify or fill any errors or omissions that may have occurred in the earlier pay determination. They also said that such periodical pay revision will avoid conflict with the employer. They also opined that the terms of reference of the pay commission is to be decided in consultation with the employees organizations. Their observations can be summarised as under:

1. Pay structure determination is to be judgemental and not arithmetical or mechanical. It must be based on fair and sound evaluation of the relevant data with the fairest possible mind.

2. Pay of a post should be such as to attract persons of the required qualifications and calibre to fill it.

3. Pay should be sufficient and satisfactory. It is in the interest of the Government to make the employee contented. A dishonest employee not
only sells his authority away he sets a wrong example, undermines the value of his office, does injustice to others and very often puts Government
to financial loss for pittance.

4. The salary structure should be coherent and should adequately reflect the substantial differences in the nature and responsibilities of various posts.

5. Efforts should be to provide as far as possible comparable emoluments for comparable work.

6. To hold out an assurance to the employee that his emoluments will not erode by increase in the cost of living.

7. Pay scales may not always be enough to fit in every kind or category of employment. We think that a suitable system of “Special Pay” or allowance can take care of such cases.

8. The capacity of the employer to pay its employees is a factor to reckon with.

The 5th CPC which was set up in April 1994 and it submitted its report in January 1997. The 5th CPC was also asked to evolve principles which should govern the structure of emoluments ( 1(a) ) . In Chapter 40 under the caption “Pay determination A Conceptual Frame”, the Commission has briefly dealt with the subject. In the initial paragraph itself the Commission stated that the earlier Pay

Commissions has gone into the matter with varying result and they do not intend to traverse in same ground. They however, noted certain emerging trends in the functioning of the Government on account of a perceptible change in the economic policies of the government and surmised to state:

a) Less governance : emphasis will be to facilitate and regulate rather than directly involving in activities.
b) Decentralization of Governmental activities due to the strengthening of Panchayat Raj Institutions.
c) Right (down) sizing the bureaucracy drastically
d) Increased trade union activities of Government employees to force the Government to pay them on par with outside rates.
e) Drastic reduction of supporting and auxiliary staff and bring about officer oriented administrative set up.
f) Professionalization of Government and consequential jacking up of wages of professionals like Doctors, Scientists, etc.

They discussed the concept evolved by the earlier Commissions, viz., characteristics of a sound pay structure, supply and demand considerations, equal pay for equal work, fair comparison, productivity, model employer, etc.

On the concept of equal pay for equal wages and in anticipation of the adequacy criterion, the 5th CPC suggested that the Government must set up a permanent Pay Body so that the intrinsic value of job assigned to each cadre could be studied. As a transitory measure they evolved “although it is not very scientific or conclusive, we feel that as a primary step towards rationalization, the entry qualification could provide a fairly relative clue. The pay scales they constructed on the premise brought about various anomalies which had to be later set right through executive actions.

On fair comparison concept they concluded that “greater responsibility devolves upon any Pay Commission to be reasonable and pragmatic and try to bridge the widening gap between the compensation packages of the Central Government and the rest of the economy.

Apart from the above concepts, the 5th CPC adopted the following criteria in deciding upon the pay structure.

a) Intrinsic value of a job
b) Linking the smaller entities to larger entities
c) To delink pay from the position in the hierarchy
d) The need to have similar approach towards the lowest and highest paid functions.
e) Actual reimbursement of expenses.
f) Capacity of Government to pay 6th CPC

Even though the 6th CPC which was set up in October, 2006 was asked to examine the principles that should govern the structure of pay vide the Government‟s terms of reference {in No. 5/2/2006-E-III(A) dated 5.10.2006}, the Commission did not attempt an elaborate discussion on the subject as was done by the earlier Pay Commissions. The issue was partially addressed in Chapter 2.1 & Chapter 2.2 (Pages 28 – 70). In Chapter 2.1 the Commission examined comparison with the public and private sectors. They noted that as on 31.3.2006 there had been 245 central PSUs (52 in Schedule A, 87 in Schedule B, 54 in Schedule C and 7 in Schedule D and the rest unclassified) out of 16.49 lakh employees 86% were workers covered by IDA pattern.

Among the pay packages in these PSUs the Commission noted:
1) In many PSUs pay scales at lower levels are open ended and have percentage based increments.
2) Most of the PSUs have introduced performance related incentive scheme.
3) DA instalments are quarterly.
4) HRA on percentage basis and CCA on Government pattern
5) Besides, PSU workers are given canteen subsidy, conveyance reimbursement, professional development allowance, night shift allowance, uniform/washing allowance, leave travel concession, etc.
6) Interest subsidy scheme on house building allowance, vehicle loan, computer loan, children education assistance and medical benefits.

The Commission then came to the conclusion that:
1. There are variations in job content and service conditions
2. Objectives of PSU are not comparable with Government.
3. The autonomy of each PSU makes comparison impossible

They ultimately observed that instead of attempting to make any comparison the Commission would devise a package incorporating the best practices.

In respect of private sector comparison the 6th CPC was of the view that the main consideration in the private sector being profit and an equal comparison with the government is impossible. However, taking note of the facts the same rule of manpower provides the source of recruitment and the need to attract the talented persons for Group A and technical posts the Commission finally recommended higher starting salary for Group A posts. The Commission also recommended the introduction of performance related incentive in the Government as was obtaining in the private sector.

In consonance with the observations they suggested to have variable increment rate for the Group A officers in pay band which was not acted upon by the government, having felt impracticable. But the higher pay packet suggested to the officers of this level was later improved by the government further.

In so far as the minimum salary is concerned the 6th CPC relied upon the necessity of computing the same on the 15th ILC norms. But the actual computation was made on a distorted version of the formulae and simultaneously departing from the retail rate of commodities suggested by the Staff Side without indicating what the real rates were on 1.1.2006. The Commission went on to manufacture an artificial rate of retail prices by adding just 20% over the whole sale price, thereby depressing the minimum wage by half. Against the Staff Side computation of Rs.10,000/- the 6th CPC worked out a figure of Rs. 5478.5 but adopted another figure of Rs.4860. The Commission inter-alia recommended.

a) Contractual appointments
b) Running pay bands to avoid stagnation
c) Grade pay at 40% of the maximum of the 5th CPC scales as fitment formula.
d) Introduce MACP scheme for time bound promotion.
e) Recommended full pension after 20 years to facilitate contractual appointments
f) Advocated cadre review which has not been carried out in most of the departments.

In fine, we may state that the Commission‟s recommendations on pay structure were sans logic and without factoring some of the principles considered by earlier pay commissions. Naturally the acceptance and implementation of the recommendation brought about innumerable anomalies which could not be resolved after repeated discussions in the National anomaly Committee.

In the succeeding chapters we shall enumerate the reasons as to why 7th CPC should adopt the need based minimum wage formula at the minimum level. The intrinsic value of the assigned job at the intermediary level, the necessity to keep the relativity both at horizontal and vertical level and the need to provide a comparable salary for the top bureaucrats, taking into account the perks, privileges, benefits, allowances and concessions that go with the posts.

E-Mail Subscription: Get Our Updates through EMail: Don't Forget to Activate Link Send to Your Mail

Related updates:

    Principles of Determination of Pay and Minimum & Maximum Wages Submitted to 7th CPC by IRTSA
    7th Central Pay Commission Terms of Reference – Cabinet approved ToR of 7th CPC
    Real wage hike the CG employee is expecting is more than 80% wage hike – Karnataka COC
    7th CPC News – Minimum wage and Pay fixation formula for 7th CPC worked out by COC Karnataka
    Minimum wage Rs.26000 – 7th Pay Commission accept NC JCM’s Demand
    Comparison of pay determination before and after 7th Pay Commission
    7th Central Pay Commission : Collection of data of Central Government Staff and Officers
    What are the expectations of the Central Government employees from the 7th Pay Commission?
    DRAFT OF NC JCM STAFF SIDE MEMORANDUM TO 7TH PAY COMMISSION

Filed Under: 7th CPC Dopt Orders, 7th CPC News, 7th CPC Pay Scale, 7th CPC Projected Pay Scale, 7th CPC Questionnaire, 7th CPC Questionnaire, 7th CPC Report, 7th CPC ToR

Pay Matrix Table 2020

Pay Matrix Level 1 | Pay Matrix Level 2 | Pay Matrix Level 3 | Pay Matrix Level 4 | Pay Matrix Level 5 | Pay Matrix Level 6 | Pay Matrix Level 7 | Pay Matrix Level 8 | Pay Matrix Level 9 | Pay Matrix Level 10 | Pay Matrix Level 11 | Pay Matrix Level 12 | Pay Matrix Level 13 | Pay Matrix Level 13A | Pay Matrix Level 14 | Pay Matrix Level 15 | Pay Matrix Level 16 | Pay Matrix Level 17 | Pay Matrix Level 18

Holiday List

Kerala Holidays | Post Office Holidays | Delhi Holidays | Mumbai Holidays | Telangana Holidays | Gazetted Holidays | Chandigarh Holidays | Kolkata Holidays | Gandhinagar Holidays | Railway Holidays  CG Office Holidays | TN Govt Holidays | Bakrid Holidays | TN Bank Holidays | BSNL Holidays | Office Holidays | National Holidays | Optional Holidays | Chhattisgarh Holidays | Jan Calendar Holidays | Mahasivaratri Holidays | Republic Holidays | TN Govt Holidays

Comments

  1. Ajeet Kumar shukla says

    August 29, 2015 at 11:45 pm

    Give me details of ida scale and cda scale basic pay and other pay

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Comments

7th CPC Latest Comments Click to Read Latest Comments

7th Pay Matrix PDF Download

7th CPC Pay Matrix Table Level 1 to 5
7th CPC Pay Matrix Table Level 6 to 9
7th CPC Pay Matrix Table Level 10 to 12
7th CPC Pay Matrix Table Level 13 to 14
7th CPC Pay Matrix Table Level 15 to 18
Pay Matrix Level 9 and 10
Level 10 salary in India
Pay Level 13 of 7th CPC
Pay Matrix Level 16
Level 7 pay matrix in hand salary
Pay Scale Chart PDF
Pay Matrix Level 10

7th CPC Pay Matrix Defence PDF

Pay Matrix Table for Defence Personnel
Defence Pay Matrix Table for Level 3 to 5
Defence Pay Matrix Table for Level 5A To 9
Defence Pay Matrix Table for Level 10 to 11
Defence Pay Matrix Table for Level 12A to 14
Defence Pay Matrix Table for Level 15 to 18
MNS Officers Pay Matrix recommended by 7th Pay Commission
7th CPC Defence Pay Arrears Calculator
Defence PBOR Pay Calculator
OROP Table No.7 – JCOs/ORs

7 CPC Latest Update News

7th CPC Fitment Factor 2.57
7th CPC Pay Fixation
7th CPC Pension Calculation
7th CPC Pension Fixation Examples
7th CPC Voluntary Retirement Scheme
DA Calculation as per 7th CPC
7th CPC MACP Scheme
7th CPC Children Education Allowance
7th CPC Transport Allowance
7th CPC Increment
7th CPC HRA
7th CPC Classification of Posts
7th CPC Armed Forces Personnel
7th CPC House Building Advance
7th CPC Leave Rules
7th CPC Travelling Allowance
7th CPC LTC Rules
7th CPC Reservation Policy
7th CPC Risk and Hardship Matrix
7th CPC New Pension Scheme
7th Pay Commission Fitment Table
7th CPC Allowances
7th CPC Advances
7th CPC AICPIN
7th CPC Briefcase Allowance
7th Pay Commission CGEGIS
7th CPC Dress Allowance
7th CPC Child Care Leave

Recent Discussions

  • M.K.KUMAR on Determination of Date of Next Increment – Rajya Sabha Questions and Answers
  • M.K.KUMAR on Is attendance compulsory for CG employees on the implementation day (01.01.2016) of the 7th CPC recommendations
  • M.K.KUMAR on 7th CPC Report on Child Care Leave (CCL)
  • M.K.KUMAR on 7th CPC Pay Fixation on Promotion and MACP Calculator
  • Rakesh kumar on Is attendance compulsory for CG employees on the implementation day (01.01.2016) of the 7th CPC recommendations
  • M.K.KUMAR on Fixation of Pay in the Revised Pay Structure to Running Staff
  • Daisy Jacpb on Financial planning for the amounts received at retirement – Pre-Retirement Counseling
  • Swetha on 7th CPC Report on Child Care Leave (CCL)
  • Aparna on 7th CPC Pay Fixation on Promotion and MACP Calculator
  • Viresh Ashok Nandimath on Determination of Date of Next Increment – Rajya Sabha Questions and Answers

CG Office Holiday List

CG Office Holiday List 2021 - PDF Download
Holiday List for CG Employees 2021 - PDF Download
Post Office Holidays 2021
List of Life Insurance Company (LIC) Holidays 2021
Delhi Government Holidays List 2021
List of State Bank of India Holidays 2020
Kendriya Vidyalaya Holiday List 2020
Tamil Nadu Government Holidays 2021
Govt Holidays October 2020 – List of Public and Closed Holidays
Holiday List with Calendar for the month of November 2020
December 2020 Holidays in India – Happy Christmas

DA Latest News for Central Govt Employees

Expected DA Calculator from January 2021 (Updated Oct 2020)
AICPIN August 2020 - Expected DA Jan 2021 - 2nd Stage Completed!
DA Loss Calculation for CG Employees
DR Loss in Pension Calculator
17% fixed DA for 18 months to CG Employees and Pensioners
Expected Dearness Allowance Calculator for Bank Employees

State Govt Pay Matrix

TN 7th Pay Commission Pay Matrix Table
Jammu Kashmir Pay Matrix Table
Maharashtra Govt Pay Matrix Table
Rajasthan Govt Pay Matrix Table

CCS Rules Orders | Holidays Orders | Leave Orders | MACP Orders | CEA Ordres | Allowances Orders | Pay Fixation Orders | Reservation Orders | LTC Orders | NAC Orders | Transfer Orders | Govt Pay Calculator | Basic Salary Calculator | First Month Pay Calculator | 7 Pay Calculator | Defence Pay Calculator | PBOR Calculator | CPSE Pay Calculator  | Teacher Salary Calculator | GDS Pay Arrears Tool | 7 CPC Salary Calculator | DA Arrears Tool 2017

Expected DA 2021 Calculator | DA Loss Calculator | DR Loss Calculator | Expected DA Jan Calculator | Expected DA Jul Calculator | OROP Calculator | 7 Pension Calculator | Pension Calculator | Pension Tool | Promotion Calculator | Option Calculator | FR22 Fixation Calculator | 6 Fixation Calculator | Strike | RTO | DA Arrears Calculator | DA Calculator

GPF Calculator | Increment Calculator | Bonus Calculator | IT Calculator | Holiday Home Rent| CGEGIS Calculator | KVS Transfer Tool | CGHS Rates Tool | CGHS Hos Tool | Allowance Search Tool | WB Pay | MHA Pay | J&K Pay | KAR Pay | RAJ Pay | TN Opt Pay | TN Pay | HRA IT Tool | HRA Calculator | 7 CPC HRA Tool | Commutation Tool | Retirement Calculator | DL33 Calculator | Pension 2018 Calculator |

Copyright © 2021 - Central Government Employees News - 7th Pay Commission News - Site maintained by TEUT Digital Concepts