Social Scientist. v 1, no. 11 (June 1973) p. 49.


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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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