8th Pay Commission proposal sent to government; salary hike on cards? Here's what it means

A proposal to constitute the 8th Pay Commission, with the aim to revise the salary and allowances paid to central government employees, has been submitted to the government by a top union leader.

All India Railwaymen Federation (AIRF) chief Shiv Gopal Mishra, who was the top negotiator on behalf of employees when the 7th Pay Commission was formed, has written a letter to the Union Cabinet Secretary demanding the formation of another pay panel on similar lines.

Mishra urged the Centre to prioritise the formation of the 8th Pay Commission, stating that over 1 crore government employees and pensioners are awaiting a revision in their salaries and pensions.

Notably, the government forms pay commissions at every 10 years to review the salary of its employees. The Manmohan Singh-led regime had formed the 7th Pay Commission in February 2014, and its recommendations were to be implemented from January 1, 2016.

However, the 7th Pay Commission's report was delayed due to extensive negotiations with the employee unions, and the hike in salaries and pensions came into effect from July 1, 2017. However, the employees and pensioners were paid arrears for the preceding 18 months.

Inflation woes

Mishra, in his letter to the Cabinet Secretary, said the revision of salaries is essential as the periodic review of dearness allowance is not sufficient to offset the impact of inflation.

The post-Covid inflation is higher than pre-Covid levels. If we compare the retail prices of essential commodities and goods which are required for daily life from 2016 to 2023, the union leader stated in his letter.

The prices have "increased by over 80% as per the local market, but we are provided only around 46% dearness allowance as of July 1, 2023," India Today quoted him as saying.

"Hence there is a gap between the actual price rise and DA provided to the employees and pensioners," he reportedly added.

Call for periodic review

Instead of only raising the DA, the government can review the pay matrix of employees on a regular basis, Mishra said. Currently, the pay commissions are formed once in 10 years to change the pay matrix.

The union leader said that the Centre may instead follow the "Aykroyd formula", which takes into consideration the changes in prices of commodities that constitute a common man's basket.

"It is suggested that this should be made the basis for revision of that matrix periodically without waiting for another Pay Commission," Mishra reportedly said in the letter.