In every Pay Commission, the minimum to maximum basic pay ratio for central government employees has been a major concern for employee bodies. The higher the difference between minimum and maximum wages, the higher the disparity. The ratio, also known as the compression ratio, represents how many times basic pay the senior-most employee in the government gets compared to the junior-most employee.
In the 2nd Pay Commission, the compression ratio was as high as 1:37.5, while it was the lowest in the 5th Commission at 10.2. Employee and pensioner bodies have long been demanding this ratio be trimmed to bring more parity to basic pays of different levels of employees.
With the 8th Pay Commission starting its work, employee bodies have again started raising their voices to reduce the compression ratio.
The Federation of National Postal Organisations (FNPO), in its letter to the secretary, National Council, Joint Consultative Machinery (NC-JCM) (Staff Side), has asked the body to recommend a 1:8 compression ratio to the 8th Pay Commission.
Know the historical compression ratios at different Pay Commissions and why FNPO wants the ratio to be cut down to 1:8 in the 8th Pay Commission.
7th Pay Commission minimum to maximum pay ratio
| Level | Status / Category | 7th CPC Entry Pay (₹) | Compression ratio |
| Level 1 | Entry Level (Group ‘C’) | 18,000 | 1:13.9 |
| Level 2 | — | 19,900 | 1:12.6 |
| Level 3 | — | 21,700 | 1:11.5 |
| Level 4 | — | 25,500 | 1:9.8 |
| Level 5 | — | 29,200 | 1:8.6 |
| Level 6 | Group ‘B’ Entry | 35,400 | 1:7.1 |
| Level 7 | — | 44,900 | 1:5.6 |
| Level 8 | — | 47,600 | 1:5.3 |
| Level 9 | — | 53,100 | 1:4.7 |
| Level 10 | Group ‘A’ Entry | 56,100 | 1:4.5 |
| Level 11 | — | 67,700 | 1:3.7 |
| Level 12 | — | 78,800 | 1:3.2 |
| Level 13 | — | 1,18,500 | 1:2.1 |
| Level 13A | — | 1,31,100 | 1:1.9 |
| Level 14 | — | 1,44,200 | 1:1.7 |
| Level 15 | HAG | 1,82,200 | 1:1.4 |
| Level 16 | HAG+ | 2,05,400 | 1:1.2 |
| Level 17 | Apex Scale | 2,25,000 | 1:1.1 |
| Level 18 | Cabinet Secretary | 2,50,000 | 1:1 |
Compression ratios from 1st to 7th Pay Commission
| Central Pay Commission | Period | Minimum Pay (₹) | Maximum Pay (₹) | Compression Ratio |
| 1st CPC | 1946–47 | 55 | 2,000 | 1:36.4 |
| 2nd CPC | 1957–59 | 80 | 3,000 | 1:37.5 |
| 3rd CPC | 1972–73 | 196 | 3,500 | 1:17.9 |
| 4th CPC | 1986 | 750 | 8,000 | 1:10.7 |
| 5th CPC | 1996 | 2,550 | 26,000 | 1:10.2 |
| 6th CPC | 2006 | 7,000 | 80,000 | 1:11.4 |
| 7th CPC | 2016 | 18,000 | 2,50,000 | 1:13.9 |
Why does FNPO want compression ratio to be 1:8?
FNPO had some observations regarding the compression ratios at various pay commissions-
FNPO’s observations are as follows:
1. Sharp disparity in early CPCs
The 1st and 2nd CPCs reflected extremely wide wage disparities, with ratios exceeding 1:36, which were later acknowledged as socially inequitable.
2. Conscious compression from 3rd to 5th CPC
From the 3rd CPC onwards, a deliberate effort was made to reduce inequality, bringing the ratio close to 1:10 by the 4th and 5th CPCs.
3. Reversal during 6th and 7th CPC
The ratio again widened in the 6th CPC and further expanded to nearly 1:14 in the 7th CPC, mainly due to:
o Higher rationalisation indices at senior levels
o Uniform DA neutralisation
o Steeper increases at the apex level
4. Absence of a consistent norm
Across CPCs, there has been no stable or codified principle for fixing the maximum pay in relation to the minimum pay.
What FNPO wants from 8th Pay Commission draft committee
FNPO proposes that the 8th CPC Draft Committee should adopt a single and transparent norm for the fixation of the maximum salary, establish a direct linkage between the need-based minimum wage and the maximum wage.
FNPO says the Draft Committee should apply a uniform multiplication factor across all levels to prevent distortion in the pay structure and recognise that 100% Dearness Allowance (DA) neutralisation applies equally to all categories of employees.
FNPO further recommends that the minimum wage should be determined strictly in accordance with the 15th Indian Labour Conference norms and that the maximum wage should be fixed at not more than eight times the minimum wage.
FNPO suggests the intermediary pay levels should be evolved through a scientific and uniform multiplication factor to ensure gradual, fair and equitable career progression.
The postal employee body also suggests any deviation beyond the minimum–maximum ratio of 1:8 should be explicitly justified with empirical evidence and international comparisons.