The Third Pay Commission

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Introduction. Since the Army has been the largest service, the remuneration structure of naval personnel has always been linked with that of the Army. Army rank structure and conditions of service were taken as the datum and Navy's differences in structure and service conditions had to be reconciled thereafter.

When the Third Pay Commission was constituted in 1970, the remuneration structure for naval personnel was the outcome of successive reviews carried out by three Departmental Committees and the earlier Pay Commissions. The framework evolved by these committees, especially the earliest, largely remained intact. Some of the concepts introduced then had almost become "fixations" and constrained the approach of earlier Pay Commissions.


The first attempt at rationalisation and simplification of the remuneration structure was made by the Post War Committee in 1946. It was given the mandate to produce pay scales related exclusively to Indian conditions, to simplify the pay system and achieve the maximum degree of harmony within each Service and between the three Services. The Government also took a decision that "the future pays of the Armed Forces should be linked with civil pays as determined following the report of the First Central Pay Commission." Based on these parameters and guided by the Post War Pay Code of the British Armed Forces, the Post War Committee recommended a remuneration system based on the following equations:-

(a) Service officers should broadly receive equal treatment with police officers.

(b) A fully trained infantry soldier with three years service was equated with a semi-skilled worker who in turn was equated with an Able Seaman of the Navy and the juniormost Leading Aircraftman of the Air Force. Whilst fixing the pay however, a higher differential was given to the Naval and Air Force equivalents due to the lack of popularity of these two Services, their higher educational qualification on entry and inherent hardships of life at sea in the Navy.

Officers. The closest comparator to Defence Services officers was identified as the Police for the simple reason that they both wore a uniform. This relativity had no other logic, especially with regard to job content. It continues till today, much to the detriment of the Service officers pay scales. In establishing this relativity, the PWPC deliberated at length as to what should be the linkage points. It was first agreed that the end of the Lieutenant Commanders scale should not exceed the end of the Senior Time Scale of the Police in which the SP was placed, thereby establishing a linkage between the two. The next link in the Police then was the DIG. The Service representatives sought a linkage of the DIG with the naval rank of Commander. However, it was finally accepted that the DIG should be placed between the naval ranks of Commander and Captain. One of the factors in establishing this linkage was that the three pillars of administration, namely the DIG of a Range, the Commissioner of a Division and the Commander of a Military District (of the rank of colonel) had near identical years of service, were of approximately the same age and required to socially interact with each other. There should therefore, be some relativity in their pay scales.

On the plea of 'all inclusive' pay and to achieve simplicity, almost all the allowances of officers were withdrawn. No such withdrawal was effected, however, for the Police and the Civil Services. The New Pay Code resulted in considerable reduction in the then existing pay scales of naval officers. Within a year of its implementation, the Government realised that there were inequities and drawbacks in the New Pay Code and sanctioned certain benefits in 1948 and 1950. In practice, the 'all inclusive' concept of pay was found unworkable.

Sailors. The Navy had initially projected a two group structure for sailors namely Artificers and Non-artificers. Amongst the Non-artificers it was seen that in some trades like Writers, Electrical, Sick berth Assistant, Stores Assistant and Communications sailors were matriculates. In 1946, matriculation was a relatively high educational qualification, it needed to be recognised in the pay structure and so a separate pay group was created for matriculates, below the Artificer. The Navy therefore emerged with a three group trade and pay structure as compared to the Army's eight groups and the Air Force's five groups. Another feature recognised by the Post War Pay Committee was the "All of a Company" concept. This was unique to the Navy. It was accepted that since sailors served onboard ships in close proximity with one another and were all combatants, there should not be wide disparity in their pay scales. Accordingly the pay scales of the non-matric 'C' Group merged with those of the matriculate 'B" Group from the rank of Petty Officer upwards.

In the case of sailors, their updated pay was depressed by 33 1/3 percent on account of 'Home Saving Element' for concessions provided in kind. Since certain allowances were admissible as percentage of pay, this resulted in a double depression. However, an addition of Rs 5 was made, which worked out to 12 1/2 percent, to compensate sailors for the hazards and hardships of naval life.

While this amounted to a formal recognition of the need for such a compensation, this rationale was not extended to cover all ranks. Thus, officers received no consideration for the peculiar conditions of naval service involving hazards, turbulence and prolonged separations from family. This was possibly due to the perception at that time that in an independent India the Armed Forces were somewhat of a luxury.

Admiral Soman recalls:

"In December 1946, I became Naval Member of the Services Pay Commission in the rank of Acting Captain - the first Indian to have reached that rank. I was 33 years old and had never before served in the madhouse that was NHQ.

"The Government had directed and Naval Headquarters had unprotestingly accepted that the Services pay scales be related to the Police pay scales. I appended a dissenting note strongly recommending that the equation be with the Indian Civil Service scales of pay. I was roundly ticked off and informed that I was there to represent NHQ's views not my own. I immediately asked to be relieved of my job but nothing happened and my dissenting note remained on file".

The Raghuramaiah and Kamath Committees

Consequent to the Second Pay Commission's Report in 1960, a Departmental Committee, headed by Shri Raghuramaiah, examined the pay and allowances of the Armed Forces. It stated that:-

"The Service representatives felt that pay scales approximating to the scales prevalent on the civil side were preferable to the existing pay structure, but that a revision would be such a complex and lengthy process that it was not practicable at the present juncture. In view of these practical difficulties, we decided that the present pay structure might be retained until such time as the Government finds it convenient to carry out a detailed review".

Another Departmental Committee under Shri Kamath was set up in 1967 to examine the adequacy or otherwise of various allowances and concessions. The recommendations made by this Committee resulted in an increase in some allowances and concessions, but left the pay structure intact.

Not having had the benefit of a review of their conditions of service and pay scales, the Armed Forces emerged into the post second Pay Commission scene with a mere arithmetical revision of their pay and allowances. At this stage the Civil Services, especially the IAS and IPS, initiated major changes in their cadre structure. A Selection Grade was introduced in the IPS, between the SP and DIG. This grade was equated to the naval rank of Commander and pressure built up for revision on the DIG's pay scale. By 1969, the DIG had overtaken the naval rank of Captain, and started drawing relativity with the ranks of Commodore and Brigadier, thereby lowering the status and relativity of the Armed Service Officer vis a vis the Police.

The Third Pay Commission

In April 1970, the Government announced the formation of the 3rd Pay Commission and, for the first time, decided to entrust the task of reviewing the pay and allowances of the Armed Forces to a Pay Commission and not to a Departmental Committee. However, there was a major difference between the terms of reference as applicable to the Armed Forces and those applicable to civilians. In the case of the Armed Forces, the Commission was not asked to make recommendations on the conditions of service but take them as given. This difference was prominently highlighted by the Commission in their report. Even on the question of the presentation of the Services case,the Commission was keen that the service personnel also should have the liberty to represent their case directly before them like civilian employees. However, their request to the Ministry of Defence to that effect was turned down on the grounds that the requirement of Armed Forces discipline would not permit such an approach. Thus the three Services could not explain their case directly to the Pay Commission. As a result, many of the anomalies injected by earlier Committees remained uncorrected.

In their approach to the formulation of Armed Forces pay, the Third Pay Commission adopted the following broad principles for determining remuneration:

(a) Implementation of the Post War Pay Committee's recommendation that future pay should be linked with civil pay and comparable to those of Class I Central Services and Indian Police Service officers.

(b) An infantry soldier with three years service to be equated with a worker classified as between semi-skilled and skilled.

(c) Regain the "all inclusive" character of military pay as recommended by the Post War Pay Committee, which had got diluted over a period of time by the grant by the Government of a number of additional allowances.

(d) Any element of Service life which was a relatively constant factor for the bulk of the service, should be compensated in the pay itself. Allowances were only to be granted in such cases where the conditions did not have uniform applicability, viz service in field areas, at high altitude or at sea. Special allowances were also recommended for the performance of hazardous duties.

Officers. The main thrust of the services was to seek parity in pay scales with the IAS. The Third Pay Commission was of the view however that the officer cadre of the Armed Forces was an omnibus group of individuals of varying disciplines, status and job responsibilities. Whilst there would certainly be some categories, though difficult to identify, who could claim parity with the IAS, the 60,000 strong Armed Forces officercadre could at best be compared with the Class I officers cadre which had a similar disparate composition. Parity with IAS was therefore not accepted and the existing relativities were retained.

Expert Cell. The Ministry of Defence created an Expert Cell comprising the Chairmen of the three Services Pay Cells, a Joint Secretary and an Additional Financial Adviser. The Expert Cell was mandated to scrutinise the Memorandum of each Service and give their own views to the Pay Commission. Unfortunately no agreement could be reached between the Service Members on the one side and the Ministry of Defence on the other. Eventually the Expert Committee Report was submitted only by the Service Members. The impact of their report was lost and the Third Pay Commission had to seek the views separately from the Ministry of Defence.

Job Evaluation of Sailors. A comprehensive job evaluation was carried out of the sailors cadre. The Pay Commission however did not accept their recommendations on the grounds that the evaluation had not been done by professional job evaluators. The sailors job description sheets remained in the archives of Naval Headquarters and were eventually used after the Fifth Pay Commission when at short notice, trade rationalisation was required by the Ministry of Defence.

Sailors Trade Structure. The advent of the Air Arm led to the creation of a separate pay group for aviation sailors on scales identical to their counterparts in the Air Force. When the Submarine Arm was formed, submarine sailors were also placed in this group. These measures were ratified by the Third Pay Commission and this new "Special Group" was placed between the Artificers Group and the Matric Group.

Compensation for 'X' Factor. In the British Armed Forces Pay Structure, the 'X' factor compensated for the uniqueness and distinct disadvantages of service life. Service Headquarters sought the extension of the 'X' factor to the Indian Armed Forces. The Third Pay Commission examined the advantages and disadvantages of Service life, considered that the former outweighed the latter and concluded that there was no justification for the 'X' factor. One of the advantages of naval life taken into consideration was the opportunity for naval personnel to visit distant foreign countries at Government expense.

Pension. The Third Pay Commission also equated military pension with the civil pension. Eligibility for pension was related to the civil service requirement of 33 years service. This was despite the fact that in the Defence Services very few individuals could achieve so many years of service. The earlier inbuilt monetary compensation for a truncated career was dispensed with and in lieu a weightage in years of service was introduced. These measures effectively neutralised the prevailing edge that military pension had.

Commodore RC Bhatnagar who served in the Navy's Third Pay Commission Cell and interacted with the Army and Air Force Pay Cells, recalls:

"A very important rider that the Ministry of Defence put down before agreeing to Service Headquarters making their projections to the Pay Commission was that there would be a Ministry of Defence Pay Cell. This cell would receive and examine the proposals of the three Services Headquarters, vet them and project final coordinated proposals to the Pay Commission. Thus we had another body to examine our proposals before these were sent to the Pay Commission in a consolidated form.

"We were formed as a "Pay Commission and Job Evaluations Cell" and we took upon ourselves to carry out a total job evaluation of every single trade at each sailor level that is as an Able Seaman, as a Leading, as a Petty Officer and as a Chief Petty Officer. For each level, we carried out an evaluation of the job content, that is the training, work content and experience requirement of each individual rate and trade. This was all recorded in a Job Evaluation Report. Some of the officers of the Cell were sent to Bombay to the Labour Institute to understand the civilian system of job-skill corelation and on that basis we carried out job evaluation. The Army and the Air Force also did the same exercise. This helped us to project to the Pay Commission, the corelated job content of every single rate in the Service including artificer sailors.

"This job evaluation exercise undertaken by us was somewhat on the pattern of an exercise done by the British Armed Forces just a few months earlier. Despite the fact that all the three British services were using quite sophisticated equipment, their findings were that Naval trades had a broader job content than their counterparts in the other two Services. Thus the Royal Navy's sailors were placed in three higher pay scales as against four scales for Royal Army and Royal Air Force personnel. It was Naval Headquarter's view at that time that we too should try to group our trades likewise, as all sailors on board are actively involved in the actual fighting of a ship vis-a-vis the many trades of the Army and the Air Force. That was the basis of our projections.

"As regards officers, we found that the Pay Commission was recommending a pay scale of an Indian Police Officer in his sixth year of service which would be higher than what was being recommended for a Captain in the Army having six years of service. A very strong representation was made by Naval Headquarters and the anomaly was rectified. A Captain of the Army and equivalents in the Navy and the Air Force in their sixth year of service not only got what the Police officer got, but also got 50 rupees more, which was a part of Special Disturbance Allowance which the Pay Commission had agreed to extend to Service officers.

"We had another peculiar situation. The rank of Captain in the Navy spanned the ranks of Colonel and Brigadier in the Army and Group Captain and Air Commodore in the Air Force. The problem was to devise a pay scale which would cover these two Army scales of Colonel and Brigadier. At one stage this was not readily accepted by the Pay Commission nor by the other two Services and the Ministry of Defence. However, we managed to convince not only the Ministry of Defence but also the Ministry of Finance (Defence) and were able to obtain approval for a combined scale for Captains in the Navy, covering both the ranks of the other two Services".

Developments After 1975.

The parameters under which the Third Pay Commission had structured their recommendations envisaged that they would be valid for the next ten years. The oil crisis of the mid seventies and the high inflation thereafter neutralised these parameters. The Government therefore introduced a series of adhoc measures. These did not alleviate matters especially for officers. The economic position of officers worsened, affecting morale and the quality of intake. By the late seventies, remedial measures became essential. In 1982, the Chiefs of Staff Committee forwarded to Government their paper on "Quality and Morale" whose major recommendation was the extension of free rations to peace areas for officers upto the naval rank of Captain. The Government was inclined to grant this in cash. Admiral RL Periera, the Chairman COSC, was able to persuade Government to sanction free rations in kind.

Re-mustering of Seaman and Engineering Mechanics. In 1977 the Ministry of Defence accepted Naval Headquarters recommendation that to keep abreast with the growth of technology in the Service, the educational qualification of Seamen and Engineering Mechanics be raised to matriculation. The Government not only approved this up gradation in educational qualification, but also directed that they be paid metric rates of pay. Seamen and Engineering Mechanics were remustered from Group `C' to Group `B'. This linkage between pay scales and educational qualification eventually became the keystone for the rationalisation of the sailors trade and pay group structure after the Fifth Pay Commission.

Cadre Reviews. The Armed Services instituted two cadre reviews between 1979 and 1982. These helped quicken promotions of officers and sailors.