8th Pay Commission news: Government shuts down speculations on major salary hike for central employees

8th Pay Commission: The hope of a substantial hike in salary and pensions for the central government employees was dashed Tuesday as the finance ministry clarified that it was not any proposal for the constitution of the 8th Pay Commission.

Rajya Sabha members Ramji Lal Suman and Javed Ali Khan had asked whether the government was planning to announce the formation of the 8th Pay Commission in the upcoming Budget in February 2025, given the prevailing inflationary trends.

In a written reply, minister of state (MoS) for finance Pankaj Chaudhary said, "No such proposal is under consideration with the government for the constitution of the Eighth Central Pay Commission for Central Government employees, at present."

On the question of whether the fiscal condition of the Union government is a limiting factor in increasing the pay of central government employees, the minister replied that the issue does not arise.

The clarification comes amid heightened speculations over the formation of the 8th Pay Commission, which has been a recurring demand from government employee unions.

What are the demands of employee unions?

The staff side of the NC-JCM has been advocating for a higher fitment factor to address inflation and rising costs of living. If the demand for a 2.86 fitment factor is accepted, the minimum basic salary of central government employees could rise from the current ₹17,990 to ₹51,451.

The 7th Pay Commission had recommended a fitment factor of 2.57, which was implemented in 2016, raising the minimum basic pay from ₹7,000 to ₹17,990. However, employee unions had demanded a factor of 3.68 at the time.

Mishra recently met finance secretary Tuhin Kanta Pandey to press for the formation of the 8th Pay Commission.

"We told him that India’s GDP is advancing at a strong pace, all sectors are growing, and the overall economic conditions are upbeat. There is no reason why the 8th Pay Commission should not be formed now," Mishra told NDTV Profit.

The Pay Commission is a body set up by the government to review and recommend changes to the salaries, pensions, and benefits of central government employees. These recommendations impact lakhs employees and pensioners and have far-reaching effects on the economy by boosting disposable incomes and consumer spending.

The 7th Pay Commission’s recommendations were implemented in 2016. While there is no official timeline for the 8th Pay Commission, employee unions have been pushing for its constitution, citing inflationary trends and economic growth in the post-Covid years.

The ongoing discussions between employee unions and the government are likely to keep the matter in focus ahead of the 2025 Budget.