3rd Pay Commission (1970-1973)

 

3rd Pay Commission (1970-1973)

Background

• Established: April 1970
• Chairman: Raghubir Dayal
• Objective: To address the disparities in pay scales and consider the socio-economic changes, including inflation, since the 2nd Pay Commission.

Key Recommendations

1. Minimum Salary:

   • Increased to ₹185 per month, up from ₹80 in the 2nd Pay Commission.

2. Pay Structure:

   • Recommended a new pay scale structure with rationalized increments and a focus on removing wide disparities between the highest- and lowest-paid employees.

3. Dearness Allowance (DA):

   • Strengthened the DA mechanism to help employees cope with inflation.
   • Introduced the concept of gradual increases in DA linked to the cost of living index.

4. Allowances:

   • Revised other allowances, including house rent and transport allowances, in line with changing urban and rural cost dynamics.

5. Pension:

   • Introduced a minimum pension of ₹40 per month and recommended a review of pension rules to make them more equitable.

6. Equity and Productivity:

   • Emphasized a balance between equitable pay and incentivizing productivity in government services.

Impact

1. Improved Living Standards:

   • Helped central government employees manage inflation and improved their overall quality of life.

2. Addressed Disparities:

   • Attempted to narrow the pay gap between various levels of employees, although challenges remained.

3. Focus on Social Security:

   • Improved pension benefits gave retired employees better financial stability.

4. Economic Strain:

   • The government faced fiscal challenges in implementing the recommendations due to higher recurring costs.

Challenges

• Employees felt the rise in DA was still inadequate to combat inflation effectively.
• Disparities between different cadres persisted, leading to demands for further revisions.

Would you like more details on how these changes were implemented or their sectoral impacts?