The traditional practice in India, coming down at least from the days of the Mughal rule was to keep a large staff of public employees on comparatively low salaries but leaving them otherwise more or less free to make whatever they could out of their position and power. As a result bribery and corruption were rife among the services.

The ill-gotten gains and the estates of public servants were not unoften confiscated by the employers after their death or even during their life if they incurred their wrath.

The salaries paid by the East India Company to its factors and servants also were very low even after its assumption of ruling powers in Bengal but they were left free to make large fortunes by private trade and acceptance of gifts and presents from the Indian rulers and potentates under their control.

This historical fact has left a legacy of bribery and corruption, which still persists in the ranks of the Indian public services.

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The scandals created by the ‘Nobabs’ and their fabulous fortunes brought home attracted the attention and criticism of British Parliament and reform began during the second governorship of Lord Clive by requiring the Company’s European servants to sign ‘Covenants’ not to accept present or engage in private trade, and to compensate them for their losses thus entailed, high salaries began to be paid to them.

Thus began the ‘Covenanted service’ the forerunners of the later day Imperial or All-India Services like the I.C.S., I.P.S. etc. The lower services were uncovenanted, manned by Indians and paid at a much lower rate than the convenanted services.

Thus was introduced an element of racial discrimination into the Indian pay structure which persisted upto the very end of the British rule.

The first and the foremost among the Indian Services under British rule was the I.C.S. or the Indian Civil Service. We have already referred to other classes of services. Before 1925, the I.C.S. had a grade pay and no time-scale.

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The Islington Commission (1912-15) disapproved of the grade system and recommended the substitution of an incremental or time-scale system. Regarding remuneration of services, the Commission laid the broad principle that they should be paid so much and so much only as was necessary to obtain recruits of the right stamp and to maintain them in such a degree of comfort and dignity as would protect them from temptation and keep them efficient.

They accepted the racial discrimination between the pay scales of the European and Indian elements of service as an inevitable necessity, but tried to mitigate it by suggesting the members of the services recruited in England should get the same pay, whether they were Europeans or Indians.

In view of the vastness of the country and absence of uniformity from department to department, it is difficult to give a picture of pay structure for the country as a whole. During the period 1908-28 there had been an all-round increase of salaries, particularly after World War I.

When the economic depression of 1929-30 came, the Government had to review the whole position. To meet the immediate needs of the emergency, certain percentage cuts were made in the salaries of the public servants.

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Then came World War II and a steep rise in prices and cost of living as a result of it the new scale of pay adopted during depression period (1931-34) proved grossly inadequate now, and the Government of India had to devise new measures to protect the employees against hardship.

In August 1942 a scheme of dearness allowances was elaborated. To begin with, this scheme applied to the non-gazetted categories of government servants only but the rate of the allowance and the maximum pay limits up to which it applied varied from time to time and in 1944 a war allowance at 17% of the pay was sanctioned for gazetted officers up to the pay limit of Rs. 2,000/- and to non-gazetted officers drawing above the maximum limits of eligibility for the dearness allowance.

These were, however, only temporary expedients, which did not satisfy the services, particularly the lower categories. Accordingly, a Central Pay Commission was appointed in May, 1946, to examine and report on the whole question of the pay rates for the employees of the Government of India.

It reported in 1947. The pay structure of services in India was based on the recommendations of this Commission. Thereafter four more Central Pay Commissions have been appointed. The Fourth Pay Commission’s report, which was implemented in 1986, provided for 36 salary scales starting with Rs. 750-940 (lowest) and going to the highest scale of Rs. 9000/- pm., fixed. The Government made some changes in it and introduced 46 scales instead.

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The Fifth Pay Commission, which presented its report in 1996, brought the number of salary seal’ of Central Government employees down to 34. The lowest scale of pay it recommended was Rs. 244I 40-3200 and the highest Rs. 30,000 fixed.

The Commission also recommended that in future pay revision should be entrusted to a permanent Pay Commission drawing its authority from a Constitutional provision whose recommendations should have a binding character. Pay should be revised annually as in other countries.

As an alternative it suggested that dearness allowance should be converted pay every time the cost of living rises by 50% over the base level. This would involve revision of p; every four to five years.

To the salaries is added also an allowance known variously as the dearness or compensatory living allowance, which is linked up with a scale based in index figures or cost of living prevailing at given time.