8th Pay Commission salary structure to focus on 4 key points, one hints at a bigger hike

The Terms of Reference will serve as guidelines for the 8th CPC members, providing a broader framework within which they can frame their recommendations.

Like previous pay commissions, the recently notified Terms of Reference have tasked the 8th CPC with working out a salary structure for central government employees. While the wording of the guideline differs from former pay panels, it offers a hint at what the 8th Pay Commission may focus on.

What do the 8th CPC's Terms of Reference hint at?

The guideline regarding salary structure is provided in point 'b' of the Terms of Reference. It mandates the 8th CPC "to work out an emolument structure conducive to attracting talent to Government service, promoting efficiency, accountability and responsibility in the work culture." From this, it can be inferred that any change in the salary structure under the 8th Pay Commission will revolve around the following four key points:

• Attracting talent to government service

• Promoting efficiency

• Accountability

• Responsibility in the work culture

To attract talented employees to the government service, the ToR hints that the new pay panel may need to recommend salaries at par with the private sector. The focus on "attracting talent to government service" may also result in a bigger pay hike for employees, especially for roles that require specialised skills.

Further, the 8th CPC may aim at rewarding employees for efficiency while recommending a salary structure that would improve accountability and responsibility in the work culture. The point 'c' of the ToR is particularly telling in this regard as it mandates the 8th CPC to examine the current system of bonus with a view to improving performance and productivity. It has also asked the 8th Pay Commission to make recommendations for an appropriate incentive scheme that would reward excellence in productivity and performance.

"To examine the existing schemes of bonus with a view to improving performance and productivity and make recommendations on the general principles, financial parameters, productivity and performance-linked parameters for an appropriate incentive Scheme to reward excellence in productivity and performance," point 'C' of the ToR says.

What did 7th CPC's ToR say?

The ToR of the 7th CPC mandated the pay commission to "examine, review, evolve and recommend changes that are desirable and feasible regarding the principles that should govern the emoluments structure including pay, allowances and other facilities/benefits, in cash or kind, having regard to rationalization and simplification therein as well as the specialized needs of various departments."

While doing the above, 7th CPC's ToR laid out the following pointers:

"In so far as the defence forces are concerned the historical and traditional parities with due emphasis on aspects unique to defence personnel is required to be kept in mind.

"The framework in the emoluments structure is required to be linked with the need to attract the most suitable talent to government service, promote efficiency, accountability and responsibility in the work culture, and foster excellence in the public governance system...

"The recommendations have to be made keeping in view the economic conditions in the country and need for fiscal prudence’ as also ‘the need to ensure that adequate resources are available for developmental expenditures and welfare measures.’

"Also to be kept in view is ‘the prevailing emoluments structure and retirement benefits available to employees of the Central Public Sector Undertakings’ as also ‘the best global practices and their adaptability and relevance in Indian conditions."