Budget 2024: 8th Pay Commission, OPS restoration raised by trade unions in meet with FM Sitharaman

The formation of 8th Pay Commission to revise the salary of central government employees, along with the restoration of Old Pension Scheme (OPS), was demanded by trade union representatives who met Finance Minister Nirmala Sitharaman on Monday.

The meeting was called by Sitharaman as per of her pre-budget consultations. She is expected to present the Union Budget 2024-25 in the third week of July.

Under the OPS, a pension of 50% of the final salary is guaranteed, whereas the National Pension Scheme (NPS) is a market-linked contribution scheme.

Among those who met Sitharaman included representatives from 12 central trade unions, including INTUC, AITUC, CITU, AIUTUC, TUCC and UTUC.

8th Pay Commission demand gains chorus

Days after the All India Railwaymen Federation (AIRF) chief Shiv Gopal Mishra wrote to the Union Cabinet Secretary seeking the formation of the 8th Pay Commission, the trade union members who met Sitharaman also raised the demand, news agency PTI reported.

The last pay panel -- 7th Pay Commission -- was formed in February 2014 by the then central government led by Manmohan Singh. Its recommendation came into effect from January 1, 2016.

The pay panels are usually constituted once in a decade to recommend the rate at which the salaries of central government employees should be revised. On annual or biannual basis, the dearness allowance for employees is revised by the Centre to offset the the impact of inflation.

CTUs demand tax relief for salaried class

The central trade unions (CTUs) who met the finance minister demanded tax relief for the salaried class. "The ceiling limit for the income tax rebate for the salaried class on their salary and gratuity must be substantially raised," PTI quoted them as saying in a joint memorandum.

"Over the decades, corporate tax rates have been slashed unjustly and at the same time increasing indirect tax burden on common people resulted in an utterly regressive tax structure. That must be corrected in the interests of fairness, equity and propriety," the memorandum added.

The CTUs also called for universal social security schemes "including minimum pension of Rs 9,000 per month" for workers under the unorganised sector.

The allocation for MNREGA, that provides rural employment, should be increased and a minimum work of up to 200 days should be guaranteed, they said.

The unions further suggested that these public welfare measures could be taken by imposing a 1% additional tax on the super-rich, which will end up boosting the government's budget receipts.