In a landmark decision, the Union Cabinet on Thursday approved the establishment of the 8th Pay Commission to revise the salaries of central government employees and allowances of pensioners. The announcement was made following a meeting chaired by Prime Minister Narendra Modi, Union Minister Ashwini Vaishnaw confirmed.
The chairman and two members of the commission will be appointed soon, the minister said, adding that consultations with central and state governments, as well as other stakeholders, will form part of the process.
PM @narendramodi Ji has approved the 8th Central Pay Commission for all Central Government employees. pic.twitter.com/4jl9Q5gFka
— Ashwini Vaishnaw (@AshwiniVaishnaw) January 16, 2025
Understanding Pay Commissions
A pay commission is constituted by the central government every decade to revise the salary structure of its employees. In addition to updating salary structures, pay commissions determine pension payments and other benefits. Each commission operates with a term of reference (ToR), which outlines its primary focus areas.
The 7th Pay Commission, established in 2016, implemented significant reforms, including an increase in the minimum basic pay from Rs 7,000 to Rs 18,000 and a rise in the minimum pension from Rs 3,500 to Rs 9,000.
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The fitment factor, a key multiplier for calculating salaries and pensions, was set at 2.57 instead of the 3.68 factor demanded by employee unions. This raised the maximum salary to Rs 2,50,000 and the maximum pension to Rs 1,25,000.
The 7th Pay Commission’s term is set to end in 2026, making the establishment of the 8th Pay Commission crucial for future adjustments.
Who is Covered Under the Pay Commission?
Pay commissions apply to all central government employees, including those in the civil services and others whose salaries are paid from the consolidated fund of India. However, employees of public sector undertakings (PSUs), autonomous bodies, and gramin dak sevaks fall outside the purview of pay commissions.
The Scope of the 8th Pay Commission
The establishment of the 8th Pay Commission is expected to impact over 49 lakh central government employees and 65 lakh pensioners, ensuring a comprehensive revision of salaries and benefits. This move highlights the government’s commitment to improving the financial well-being of its workforce.
The 8th Pay Commission’s recommendations will play a pivotal role in defining the future of salaries, pensions, and allowances for central government employees. This development is set to contribute significantly to India’s economic framework while addressing employee demands for fair compensation.