• Source:JND
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The union government has recently approved the formation of the 8th Pay Commission to facilitate the reappraisal of the salaries and allowances of about 50 lakh central government employees and 65 lakh pensioners, including those from the defence sector. The decision of the Union Cabinet came on January 16, just before the presentation of Budget 2025.

The 7th Pay Commission was formed in 2014 and came into effect on January 1, 2016. Considering the previous pay commission timeline, the recommendations of the 8th pay commission may come into effect until the year 2026. With the news of the 8th Pay Commission, there can be a sea change in the pay structure of both employees and pensioners.

Salary and Allowances Increments

The expectation of an increase in the fitment factor decides the salary structure and even the pension amount. If the fitment factor increases from its present 2.57 to 2.86, the minimum basic salary may increase from ₹18,000 to become somewhere in the ₹51,480 ballpark. Such an adjustment will carry with it a substantial raise in allowances and the final take-home salary of the employees.

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Increament in penison

Other modifications will also apply to central government pensioners. When the fitment factor is raised to 2.86, the minimum pensions will rise from Rs 9,000 to an estimated Rs 22,500–Rs 25,200. At the same time, the increase in allowances may push the pension structure upwards by about 186%, which brings about considerable financial comfort to the retirees.

A Ten-Year Cycle of Revisions

It was an old practice wherein the central government used to make a new Pay Commission after ten years that examined and recommended amendments in pay scales and allowances for employees. For example, the minimum basic pay increased from ₹7,000 to ₹18,000 in the case of the 7th Pay Commission while that of the pension increased from ₹2,500 to ₹9,000 in the case of the minimum amount.

The 8th Pay Commission would work with the chairman, who is further assisted by two other commission members, further broadened by consulting with the central and state representatives, as well as other stakeholders. The state governments are also set to follow suit as in previous years to alter the salary structure for their employees in light of recommendations made by the Central Pay Commission.

Central government employees and pensioners are eagerly waiting for these long-due reforms that promise huge fiscal benefits as the budget for 2025 is around the corner.

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