In a significant development for central government employees, Union Minister Ashwini Vaishnaw announced on Thursday that the government has approved the formation of the 8th Pay Commission. This move is expected to have a far-reaching impact on the salary structures and benefits of millions of government employees and pensioners across the country. 

India Government Approves Formation of 8th Pay Commission
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Pay commissions are generally constituted every 10 years to recommend revisions in salaries, pensions, and allowances for central government employees. The last such panel, the 7th Pay Commission, was formed in February 2014 under the Manmohan Singh-led government. Its recommendations, which included significant changes in pay scales and allowances, were implemented starting January 2016.

The 7th Pay Commission, implemented in 2016, introduced significant reforms, including the revision of pay scales and allowances. With the announcement of the 8th Pay Commission, employees are hopeful for further enhancements in their pay structure and benefits. 

The announcement comes amidst persistent demands from employee unions and staff associations, who have been urging the government to initiate the process to ensure timely implementation. With the last salary revision coming into effect on January 1, 2016, the next pay revision is expected from January 1, 2026. The 8th Pay Commission will be tasked with determining the fitment factor and other key modalities for the salary and pension revisions.

This will affect over 50 lakh central government employees and 65 lakh pensioners, starting from FY 2026-27. Union Minister Ashwini Vaishnaw announced that the pay hike could be up to 20% for senior staff and around 25% for employees up to level five. Prime Minister Modi emphasized that this move will improve living standards and boost consumption.

This decision follows a recent increase in the dearness allowance (DA) for central government employees, which has now exceeded 50% of their basic salary. Since last July, employees have been receiving 53% of their basic salary as DA, and pensioners also get 53% as dearness relief.

Under the new commission, salaries could rise by as much as 186%. Minimum basic pay could reach Rs 51,000 per month due to a fitment factor of 2.86. The government plans to introduce changes through the Central Civil Services (Revised Pay) Rules, 2025.

The 7th Pay Commission introduced a fitment factor of 2.57, resulting in an average salary increase of 23.55% and aligning pensions with the ‘One Rank, One Pension’ scheme. Prior to that, the 6th Pay Commission used a factor of 1.86.

For the 8th Pay Commission, it is speculated that the fitment factor will range between 2.6 and 2.86, potentially raising salaries by 25-30% and pensions accordingly.

Since 1947, seven pay commissions have been established, with the 7th Pay Commission taking effect in 2016. Its term is set to end in 2026.

Details regarding the composition of the commission, its mandate, and the timeline for submitting its recommendations are yet to be disclosed. The move reflects the government’s commitment to addressing the needs of its workforce and ensuring competitive compensation packages. 

The announcement has garnered attention from employee unions and organizations, who are likely to push for discussions on issues like higher allowances, revisions in Dearness Allowance (DA), and better pension schemes. 

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