Centre receives new proposal to set up 8th pay commission

The Central government has received a proposal to set up the Eighth Pay Commission, with the upcoming Budget for 2024 expected to be unveiled in July.

The proposal has been sent to the government so that the pay commission can review the basic pay, allowances, pension, and other benefits for central government employees and pensioners.

The Secretary of National Council, Shiv Gopal Mishra (staff side, Joint Consultive Machinery for central government employees) in a letter to the Cabinet Secretary urged the government to prioritise the formation of the 8th Pay Commission.

The central pay commission, which is formed every ten years examines the current pay structure, allowances, and benefits of central government employees, laying emphasis on critical changes based on factors like inflation.

Prime Minister Manmohan Singh has set up the seventh Pay Commission on February 28, 2014, the recommendations of which took effect from January 1, 2016.

As per the time duration, the 8th Central Pay Commission is proposed to begin from January 1, 2026, however, the government has not yet announced its formal establishment.

It may be mentioned that over 1 crore central government employees await updates on the 8th Central Pay Commission. This comes after Narendra Modi returned as a Prime Minister for the third consecutive term.

According to Mishra, inflation has surged to an average of 5.5 per cent post the Covid pandemic, indicating that the inflation after Covid is higher than pre-Covid levels. 

“If we compare the retail prices of essential commodities and goods which are required for daily life from 2016 to 2023 they have increased by over 80 per cent as per the local market, but we are provided only around 46 per cent Dearness Allowance as of 1/7/2023. Hence there is a gap between the actual price rise and DA provided to the employees and pensioners," he said as per the letter. 

Mishra emphasised the importance of periodic reviews of the pay matrix rather than waiting a decade. He suggested utilising the Aykroyd formula, which tracks changes in commodity prices essential to the common man's basket, as a basis for these periodic revisions. 

Mishra pointed out that despite the Dearness Allowance (DA) for government employees and pensioners reaching 50 per cent from January 1, 2024, there has been no decision yet to restore the Pension under CCS(Pension) Rules, 1972 (updated to 2021) for those recruited after January 1, 2004. 

He said that more than 20 lakh civilian central government employees contribute 10 per cent of their basic pay and DA monthly to the National Pension System (NPS), which reduces their take-home pay. 

In light of these factors and current necessities, Mishra stressed the need to establish the 8th Central Pay Commission without delay and urged the government to engage in discussions and settlements to revise the pay scales, allowances, pension, and other benefits for central government employees.