7th Pay Commission Vs 6th Pay Vs 5th Pay: Decoding How Salary Of Central Govt Employees Jumped Exponentially

As the central government has announced the establishment of the 8th Central Pay Commission (CPC), about 36.57 lakh central government employees and 33.91 lakh pensioners are expecting financial benefits.

The 8th Pay Commission will be constituted soon and will go through a detailed task in determining its minimum pay. While the minimum pay of the 8th CPC will be known in due time, here's a look at how the salaries of central government employees skyrocketed from the 5th Pay to the 6th Pay and the latest 7th Pay Commission.

The minimum pay of the central government employees during the 5th CPC was Rs 2550. It was increased to Rs 7000 in the 6th CPC and was raised to Rs 18,000 in the 7th CPC. Here's decoding how salary of central govt employees jumped Exponentially from 5th pay commission to 7th pay commission.

The 5th Pay Commission used the ‘Constant Relative Income Approach’ to determine the minimum pay,  which means the real minimum pay should grow in proportion to the cost of living. It was added to the DA of Rs 1,110 to arrive at the ‘price protected’ minimum pay of Rs 1,860 as on 01.01.1996. The amount was finally increased to Rs 2550 at the implementation stage.

The 6th Pay Commission used the norms set by the 15th Indian Labor Conference (ILC) in 1957 to determine the need-based minimum wage for a single industrial worker. 

As per Supreme Court directives, the 6th CPC took into account additional expenditure components towards children’s education, medical treatment, recreation, festivals, and ceremonies. The 6th CPC  later arrived at a minimum wage of Rs 5,479. This amount was increased by about 22 percent to Rs 6,660, which was recommended as the minimum pay. Ultimately, the minimum pay was fixed at Rs 7,000 per month on 01.01.2006, at the implementation stage.

The 7th CPC used the guidelines set by the 15th Indian Labor Conference (ILC) in 1957 to determine the need-based minimum wage for a single industrial worker. Using the ILC norms, the 7th CPC arrived at a minimum pay of Rs 18,000, which was 2.57 times the minimum pay of Rs 7,000 fixed by the government while implementing the 6th CPC.

According to the 7th CPC, the minimum pay of Rs 18,000 per month is fair and reasonable and would provide a decent standard of living to the lowest-ranking employee in the central government.  "After considering all relevant factors the Commission is of the view that the minimum pay in government recommended at ₹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 CPC said.