The Centre has received another proposal to immediately constitute the Eighth Pay Commission to revise the basic pay, allowances, pension and other benefits of the central government employees and pensioners. In a letter addressed to the Cabinet Secretary, Government of India, Shiv Gopal Mishra, Secretary, National Council (staff side, Joint Consultive Machinery for central government employees), pointed out why the central government should form the 8th Pay Commission on priority. Read what he has said in his letter.
What is a pay commission?
A central pay commission is typically constituted at intervals of ten years. The pay commission examines the current pay structure, allowances, and benefits of the central government employees and recommends the changes that need to be made, keeping in mind external factors such as inflation. The Seventh Pay Commission was formed by former Primer Minister Manmohan Singh on February 28, 2014. It submitted its report on November 19, 2015, and the recommendations of the 7th CPC came into effect on January 1, 2016.
When will the 8th Pay Commission be constituted and implemented?
Since there is a gap of ten years between the two pay commissions, the next pay commission — the 8th Central Pay Commission — should be implemented from January 1, 2026. The Centre has not made any official announcement regarding the constitution of the 8th Central Pay Commission. As the Lok Sabha Elections 2024 is now over and Modi 3.0 is back at the Centre, over 1 crore central government employees are eagerly waiting for the latest update on the Eighth Central Pay Commission.
Why is there an urgent need for the 8th Pay Commission? Read the letter
Mishra claimed that the Centre earlier said that the inflation was in the range of 4% to 7% and it would be around 5.5% on average. “The post-COVID inflation 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% as per the local market, but we are provided only around 46% 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,” as per the letter.
“The central government revenue has also doubled from the year 2015 to 2023 as per the budget statements we can notice a considerable increase in the revenue collection. The central government’s actual revenue has increased by over 100%. Hence the central government has more paying capacity compared to the year 2016. The GST collection has also increased in April 2023 Rs 1.87 lakh crores has been collected. Income tax collections were highest in the year 2022-23. The gross Personal Income Tax collection (including STT) (provisional) in FY 2022-23 is at Rs. 9,60,764 crore and has shown a growth of 24.23% over the preceding year,” Mishra said.
“India’s indirect tax collections rose 7.21% in 2022-23 to 13.82 lakh crore from 12.89 lakh crore in the previous year. Source Central Board of Indirect Taxes and Customs (CBIC). The Budget estimate for the year 2023-24, revenue collection is expected to be Rs 33,60,858 crore, gross revenue in 2022-23 was Rs 30,43,067 crores. After state shares net central government’s actual revenue was Rs 20,86,661 crore. The staff strength of central government employees has decreased in the last decade with about 10 lakh vacancies. The work pressure is on the existing employees,” according to the letter.Moreover, the number of central government employees has decreased sharply in the last decade with about 10 lakh vacancies. “The work pressure is on the existing employees,” Mishra said.He said, “The actual expenses for wages (salary) and allowances are only 7.29% of the total revenue expenditure for the central government employees for the year 2020-21. In respect of pensioners the actual expenses on pension is around 4% of the total revenue expenditure.”
Demand to review the pay matrix of the central govt employees periodically
Further, Mishra said, “It is also recommended that the matrix may be reviewed periodically without waiting for the long period of ten years. It can be reviewed and revised on the basis of the Aykroyd formula which takes into consideration the changes in prices of the commodities that constitute a common man’s basket, which the Labour Bureau at Shimla reviews periodically. It is suggested that this should be made the basis for revision of that matrix periodically without waiting for another Pay Commission.”
No decision on restoring the Old Pension Scheme yet
“The government so far neither accepted the above recommendations nor constituted the 8th Central Pay Commission. DA of the central government employees and Pensioners have already reached 50% w.e.f. 01.01.2024 the DA element will cross 50% considering the inflation and the price rise. It is also pertinent to mention here that more than 20 lakh civilian central government employees are governed under the National Pension System and every month they have to contribute 10% of their basic pay and DA to the NPS. This considerably reduces their take-home pay. The government has so far not agreed to our demand to scrap NPS and to restore the Pension under CCS(Pension) Rules, 1972 (now 2021) to the central government Employees recruited on or after 01.01.2004,” the letter said.
“Considering all the above aspects and today’s requirement of life and also to attract qualified and talented candidates to the Government service time has now come to immediately constitute the 8th Central Pay Commission and to revise the pay scales/allowances/pension and other benefits of the central government employees through mutual discussions and settlements. Therefore, the staff side demands that the government of India may immediately constitute the 8th Central Pay Commission,” the letter concluded.
