New Delhi: The minimum pay for Central government employees has risen 225 times since 1959, when the second pay commission submitted its report. While that number may look staggering — and before anyone starts to think government employees are overpaid (because they are not) — that translates into a modest CAGR of just over 10%, which is not very different from the kind of raises most people working for private companies have been receiving for the past few years (which have not particularly been good). In good years, private sector employees get raises between 13% and 15%.
The second pay commission, which was the first such exercise in Independent India, fixed a minimum pay of Rs.80 (Rs.70 basic pay plus Rs.10 dearness allowance or DA) for Central government employees.
On Thursday, the seventh pay commission report recommended a minimum pay of Rs.18,000 per month, making it a 225 times growth from Rs.80.
The first pay commission report came in 1947 before Independence and was implemented retrospectively from 1946. As per the recommendation of the first pay commission, the minimum wage was then Rs.55 (Rs.30 basic pay plus Rs.25 DA).
The third pay commission report submitted in March 1973, three years after it was constituted, pegged the minimum pay at Rs.185 for Central government employees. The government modified it a bit and minimum wage was raised from Rs.185 to Rs.196 per month.
The fourth pay commission recommended a minimum pay of Rs.750 per month for Central government staff. The commission was set up in 1983 and its recommendations came into force from January 1986.
The fifth pay commission increased the minimum pay from Rs.750 to Rs.2,550. The pay commission recommendations came into effect from January 1996.
The sixth pay commission pegged a minimum salary of Rs.6,660, which was revised to Rs.7,000 per month, according to the seventh pay commission. The sixth pay panel recommendations were implemented from January 2006.
The seventh pay panel has recommended increasing the minimum pay by 2.57 times to Rs.18,000 for Central government employees with the belief that along with other facilities and allowances, this will provide a decent living standard to government employees at the lowest rung.
“After considering all relevant factors the Commission is of the view that the minimum pay in government recommended at Rs.18,000 per month, w.e.f. 01.01.2016, is fair and reasonable and one which, along with other allowances and facilities, would ensure a decent standard of living for the lowest ranked employee in the Central Government,” the 7th pay commission report underlined.
How is minimum wage calculated?
The minimum wage is calculated for a family of four—husband, wife and two children. While the husband is assigned one consumption unit, wife gets 0.8 unit and the two children below the age of 14 get 0.6 units each—thus the “minimum wage needs to address 3 consumption units” in total. The formula was devised by the Indian Labour Conference in 1957 and successive pay commissions follow it.
The minimum wage calculation considers expenditure on heads like food, clothing, fuel, education, electricity, expense on behalf of marriage, recreation and festivals; provides a certain amount for housing; and a portion for the skill that an employee possesses. All Central government employees are considered skilled.
For example, the seventh pay commission has assigned Rs.9,218 for food and clothing per month and provides Rs.2,033 per month towards marriage, recreation, festivals etc as part of the Rs.18,000 minimum pay.
The second pay commission, which was the first such exercise in Independent India, fixed a minimum pay of Rs.80 (Rs.70 basic pay plus Rs.10 dearness allowance or DA) for Central government employees.
On Thursday, the seventh pay commission report recommended a minimum pay of Rs.18,000 per month, making it a 225 times growth from Rs.80.
The first pay commission report came in 1947 before Independence and was implemented retrospectively from 1946. As per the recommendation of the first pay commission, the minimum wage was then Rs.55 (Rs.30 basic pay plus Rs.25 DA).
The third pay commission report submitted in March 1973, three years after it was constituted, pegged the minimum pay at Rs.185 for Central government employees. The government modified it a bit and minimum wage was raised from Rs.185 to Rs.196 per month.
The fourth pay commission recommended a minimum pay of Rs.750 per month for Central government staff. The commission was set up in 1983 and its recommendations came into force from January 1986.
The fifth pay commission increased the minimum pay from Rs.750 to Rs.2,550. The pay commission recommendations came into effect from January 1996.
The sixth pay commission pegged a minimum salary of Rs.6,660, which was revised to Rs.7,000 per month, according to the seventh pay commission. The sixth pay panel recommendations were implemented from January 2006.
The seventh pay panel has recommended increasing the minimum pay by 2.57 times to Rs.18,000 for Central government employees with the belief that along with other facilities and allowances, this will provide a decent living standard to government employees at the lowest rung.
“After considering all relevant factors the Commission is of the view that the minimum pay in government recommended at Rs.18,000 per month, w.e.f. 01.01.2016, is fair and reasonable and one which, along with other allowances and facilities, would ensure a decent standard of living for the lowest ranked employee in the Central Government,” the 7th pay commission report underlined.
How is minimum wage calculated?
The minimum wage is calculated for a family of four—husband, wife and two children. While the husband is assigned one consumption unit, wife gets 0.8 unit and the two children below the age of 14 get 0.6 units each—thus the “minimum wage needs to address 3 consumption units” in total. The formula was devised by the Indian Labour Conference in 1957 and successive pay commissions follow it.
The minimum wage calculation considers expenditure on heads like food, clothing, fuel, education, electricity, expense on behalf of marriage, recreation and festivals; provides a certain amount for housing; and a portion for the skill that an employee possesses. All Central government employees are considered skilled.
For example, the seventh pay commission has assigned Rs.9,218 for food and clothing per month and provides Rs.2,033 per month towards marriage, recreation, festivals etc as part of the Rs.18,000 minimum pay.
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