8th Pay Commission: One demand is back after 10-year wait, and it could change future salary hikes

In list of key demands presented before the 8th CPC on August 7, the Bharat Pensioners Samaj (BPS), representing nearly a million pensioners, has listed “Revision of pay and pension every five years” as done of the items.

The National Council-JCM Staff Side highlighted this issue in its memorandum to the 8th CPC, saying, “There is a strong need for periodic pay revision, ideally every five years, to maintain adequacy and relevance.”

The Railway Senior Citizens' Welfare Society (RSCWS) explained the mechanics of the slow erosion in its memorandum, saying, "Although Dearness Allowance provides partial protection against inflation, the gap between periodic pay revisions and the continuously rising cost of living, results in erosion of real wages and pensions.” It further said that “many allowances remain static for long periods and are revised only after a Pay Commission.”

The RSCWS suggested that “a mechanism for periodic automatic revision linked with inflation or cost indices” should be recommended by the 8th CPC.

The FNPO's 728-page memorandum to the 8th CPC called for scrapping the decennial commission altogether. “The 10-year Pay Commission cycle is ill-suited for the rapid economic shifts of the 21st century,” it said, adding, “By the time a new commission is formed, real wages have often been significantly eroded by inflation.”

The FNPO has proposed a Permanent Wage Review Body that would trigger automatic fitment reviews whenever dearness allowance crosses 50%. It also said that the 8th CPC should to be declared the final periodic commission.

However, what a five-year cycle would cost the exchequer is not quantified in any of the memorandums. The NCJCM Staff Side, however, argued the Government can absorb it, recording that GDP at current prices has grown 165% since FY 2014-15 and combined tax revenue has risen 205%. It concluded that the Government is “well-positioned to comfortably absorb the financial implications.”.

Decade-old demand

Whether the Commission endorses a five-year cycle, a permanent review body, or simply a higher increment, the employees' unions' demand is consistent: that a decade between revisions is a decade too long. And this is a decade-old demand.

It was raised before the 7th CPC also. In its answers to the questionnaire of 7th CPC, the Bharatiya Pratiraksha Mazdoor Sangh (BPMS) had argued for this issue from a different. The BPMS had then pointed out that even public sector undertakings once revised pay every five years. “The periodicity of such revision was 5 years before 1997 and has thereafter been modified to 10 years,” it said, adding that the Government has allowed PSUs to opt for “either a 10 year periodicity of pay revision with 100% neutralization of DA or a 5 year periodicity on the basis of graded neutralization.”