Prime Minister Narendra Modi has approved the constitution of 8th Pay Commission for central government employees.
This decision, announced on January 16, 2025, is set to benefit approximately 50 lakh employees and 65 lakh pensioners, including serving and retired defence personnel.
Union Information and Broadcasting Minister Ashwini Vaishnaw stated that the Chairperson and two members of the Commission would be appointed soon.
Typically, a retired Supreme Court judge heads the Pay Commission.
The Eighth Pay Commission will hold extensive consultations with Union and State governments and other stakeholders before making its recommendations.
8th Pay Commission: Background and Financial Implications
The Pay Commission is a crucial mechanism in India.
It is established to review and recommend changes to the salary structure, allowances, and benefits of central government employees.
Since 1947, seven Pay Commissions have been constituted, with the last one implemented in 2016.
The Seventh Pay Commission, headed by Justice A.K. Mathur, started functioning in 2014 and submitted its report in 2016.
The government implemented the recommendations of the Seventh Pay Commission in November 2016, resulting in an expenditure of about ₹1 lakh crore in 2016-17.
The government expects the establishment of the Eighth Pay Commission to have significant financial implications.
The recommendations of the Pay Commission will form the basis for wage settlements in public sector undertakings and similar pay revision exercises in states.
This move will provide a substantial boost to consumption and economic growth, along with an improved quality of life for government employees.
Reactions from Trade Unions & Impact on Employees and Pensioners
Trade unions have welcomed the announcement of the Eighth Pay Commission.
They have been demanding the constitution of the new Pay Commission for over a year.
C. Srikumar, general secretary of the All India Defence Employees Federation, emphasized the need for clarity on the concepts of “living wage” and “living pension”.
He highlighted that the current minimum wage formula is based on the 15th Indian Labour Conference held in 1957.
He pointed out that this formula is inadequate in today’s context.
The recommendations of the Eighth Pay Commission will benefit around 4.5 million central government employees.
Additionally, approximately 6.8 million pensioners, including defence personnel, will also benefit from these recommendations.
In Delhi alone, about 400,000 employees, including defence and Delhi government employees, will benefit from the scheme.
The government plans to implement the Pay Commission’s recommendations starting January 1, 2026.
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