Not 8th Pay Commission, 7th CPC wanted a permanent pay panel, end DA revision twice - here's why

Amid all the buzz surrounding the 8th Central Pay Commission (CPC), Central Government employees may find it interesting that the previous pay panel had recommended setting up a permanent Remuneration Authority. It even suggested that such a system would help end the need to revise dearness allowance (DA) rates twice every year. But why?

The reason is mentioned in the 7th Pay Commission's report.

The members of the 7th CPC interacted with officials in countries like Australia and New Zealand, where they have permanent remuneration authorities. They felt that India should have a similar system that would review the pay structures within a given budgetary allocation annually.

"The Commission, after its interaction with the authorities of Australia and New Zealand, feels that India should also have a permanent Remuneration Authority that should review the pay structure based on job roles evaluation, remuneration prevailing in the market for comparable job profiles, general working of the economy, etc. within a given budgetary outlay," the 7th CPC noted in its report.

Currently, the government sets up a pay commission every 10 years. However, the 7th CPC members believed that the permanent Remuneration Authority would help revise pay structures at more regular intervals, such as annually.

"With this, the pay structure could be revised periodically, at more regular intervals, say annually, without putting an undue burden on the public exchequer every ten years, as is the case now," they said in the report.

The 7th CPC report also highlighted several other benefits of having a permanent Remuneration Authority:

• The impact of the revision of wages could be easily absorbed in each year’s budget
• Quicker remediation of anomalies would take place, leading to greater employee satisfaction.
• As salaries would be revised annually, the present system of biannual revision of DA could also be dispensed with.