Tax payers ritual of 'extra burden' as Babus will smile and pick up heavier pay packets !!
Union Cabinet on Thursday, Jan 16, 2025 approved the 8th Pay Commission to revise the salaries of central government employees and pensioners.
Union Minister Ashwini Vaishnaw announced the decision after the cabinet meeting.
The decision to set up the 8th Pay Commission was taken at a meeting of the Cabinet chaired by Prime Minister Narendra Modi.
The date for setting up the commission has not been disclosed.
This development comes just ahead of the Union Budget 2025 and is expected to bring a salary hike for government employees and retirees.
The 8th Pay Commission is expected to build upon the reforms introduced by the 7th Pay Commission, which was implemented in January 2016 and will conclude its recommendations by the end of 2025.
A committee has been set up by the Central government to oversee its implementation.
Reports suggest a possible increase in the fitment factor from 2.57 to 2.86, a key parameter in calculating revised salaries.
If implemented, this change could result in a rise in the basic salaries of government employees. The fitment factor determines how much the basic pay is multiplied to calculate revised salaries and pensions.
The salary structure for government employees has seen significant changes under previous pay commissions.
The 7th Pay Commission, implemented in 2016, introduced a simplified pay matrix replacing the older pay bands and grade pay system.
It set the minimum monthly pay at Rs 18,000 and the maximum at Rs 2.5 lakh for Cabinet Secretaries, with a fitment factor of 2.57 times the basic pay. It also increased the gratuity ceiling to Rs 20 lakh and rationalised allowances like HRA.
Before this, the 6th Pay Commission in 2006 introduced the pay band and grade pay system, with a minimum monthly pay of Rs 7,000 and a maximum of Rs 80,000 for secretary-level officers.
Its fitment factor was 1.86 times the basic pay, and the gratuity ceiling was Rs 10 lakh, with allowances rationalised to enhance benefits like housing rent allowance.
These revisions laid the groundwork for the upcoming 8th Pay Commission.
The expected salary hike will increase the Govt employees' disposable income, potentially boosting consumer spending ahead of Budget 2025.
A pay commission is constituted by the central government once every decade to revise the salary structure of its employees. In addition to revising the salary structure, each pay commission has a term of reference (ToR), which broadly defines its focus. Pay commissions also decide pension payments.
There are over 49 lakh central government employees and nearly 65 lakh pensioners. The 7th Pay Commission was set up in 2016, and its term will end in 2026.
No comments:
Post a Comment