8th Pay Commission News:
8th Pay Commission News: The central government is inching closer to taking up a decision to set up the 8th Pay Commission, which will determine the revision in salary structure, allowances, and pensions for over one crore central government employees and pensioners. According to a report by Moneycontrol, the government has completed the preparations for its Terms of Reference (ToR) for the new commission and it is likely to be sent for cabinet approval by early April. Once approved, a formal notification will be issued for the formation of the new pay commission (8th pay commission).
Next Steps in the Process
According the report, the Finance Ministry had sought suggestions from key ministries, including the Ministry of Defence, Ministry of Home Affairs, and the Department of Personnel and Training (DoPT), on what aspects the commission should focus on. Moneycontrol reported quoting a senior official that some inputs have been received, while others are awaited. Once the cabinet gives the green signal, the commission will be formally notified.
When will the commission start functioning?
If everything goes as per schedule, the 8th Pay Commission may start functioning as early as April 2025 and submit its report by March 2026. But previous pay commissions have taken more than a year to complete their recommendations, so the timelines may vary.
Who will be affected?
The commission's recommendations will directly impact over 50 lakh central government employees and pensioners, including a large number of defence personnel. The implementation of the changes will have a significant impact on the exchequer. For instance, the 7th Pay Commission, which came into effect in 2016, added ₹1 lakh crore to government expenditure. The impact of the 8th Pay Commission on finances will be felt from FY27 (2026-27).
Boost salaries and economic growth
Apart from increasing salaries, allowances and pensions, the 8th Pay Commission's recommendations are expected to boost consumption and overall economic growth. The government believes that the amendment will improve the standard of living of employees and contribute to economic activity.
No merger of 50% DA for now
Also, the government has rejected the proposal to merge 50% of dearness allowance (DA) and dearness relief (DR) into the basic pay. Minister of State for Finance Pankaj Chaudhary clarified in response to a question in the Rajya Sabha that there is no such proposal at the moment.
History of Pay Commissions
Seven pay commissions have been set up since Independence, each of which has played a key role in improving the pay pattern, allowances and pension benefits of government employees. The 8th Pay Commission, which is to be constituted soon, will bring sweeping changes and benefits to millions, but will also put a long-term financial burden on the government.
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