The government is considering a proposal to establish the Eighth Central Pay Commission, which would review and potentially revise the pay, allowances, pension, and other benefits for central government employees and pensioners. Shiv Gopal Mishra, Secretary of the National Council (staff side, Joint Consultive Machinery for central government employees), has formally requested the formation of this commission.
Key Points of the Proposal:
1. Formation Frequency:
  - Central pay commissions are traditionally set up every ten years.Â
  - The Seventh Pay Commission was established on February 28, 2014, with its recommendations taking effect from January 1, 2016.
  - Following this ten-year cycle, the Eighth Pay Commission would typically be due to start from January 1, 2026.
2. Post-COVID Inflation Impact:
  - Inflation has increased post-COVID, averaging 5.5%, compared to the earlier range of 4% to 7%.
  - Prices of essential commodities have risen by over 80% from 2016 to 2023, while the Dearness Allowance (DA) has only increased by around 46% as of July 1, 2023, creating a gap between actual price rise and the DA provided.
3. Recommendation for Periodic Reviews:
  - Mishra suggested that instead of waiting ten years, the pay matrix should be reviewed and revised periodically.
  - He proposed using the Aykroyd formula, which the Labour Bureau at Shimla reviews periodically, to adjust the pay matrix based on changes in the prices of common commodities.
4. Concerns Regarding the National Pension System (NPS):
  - Over 20 lakh civilian central government employees contribute 10% of their basic pay and DA to the NPS, reducing their take-home pay.
  - Mishra highlighted the need to address the gap created by the lack of decision to restore the Pension under CCS (Pension) Rules, 1972 (now 2021), for those recruited after January 1, 2004.
5. Call for Immediate Action:
  - Mishra emphasized the importance of attracting qualified and talented candidates to government service by ensuring competitive pay and benefits.
  - He urged the government to constitute the 8th Central Pay Commission promptly to address these needs through mutual discussions and settlements.
Context and Implications:
- The proposal comes as the government prepares the upcoming Budget for 2024, which might be a month away.
- With the recent re-election of Prime Minister Narendra Modi for a third consecutive term, over 1 crore central government employees are awaiting updates on the commission.
- The establishment of the Eighth Pay Commission could significantly impact the financial planning and allocation of resources in the upcoming budget.
The government's decision on this proposal will be crucial for addressing the inflation-adjusted pay scales and benefits of central government employees and ensuring their financial well-being in the current economic climate.
