How long before 8th Pay Commission benefits reach central government employees?
The Union Cabinet approved the formation of the 8th Pay Commission to revise the salaries and allowances of nearly 50 lakh central government employees and close to 65 lakh pensioners.
While this decision brings hope for improved pay scales, the government has not yet announced a specific timeline for establishing the commission or implementing its recommendations.
This raises an important question, how long will it take before government employees actually see the benefits of the 8th Pay Commission?
TIMELINE OF 7TH PAY COMMISSION
The 7th Pay Commission was formed in February 2014. By November 2015, it submitted its recommendations, which were implemented in January 2016. The process took approximately 22 months from the commission’s formation to the implementation of its recommendations.
If the 8th Pay Commission follows a similar pattern, government employees can expect to wait around two years after the commission is formed for the revised pay structure to take effect. However, as of now, no formal notification or timeline for the formation of the 8th Pay Commission has been released.
HOW THE PAY COMMISSION WORKS
The formation and operation of a Pay Commission involves several steps, which take considerable time.
For instance, the 7th Pay Commission was chaired by Retd. Justice Ashok Kumar Mathur, with Vivek Rae and Dr Rathin Roy as members and Meena Agarwal as the Secretary. Their work included holding extensive consultations, collecting data, and analysing existing pay structures.
“The commission conducts extensive consultations and holds multiple meetings to gather data, analyze existing pay structures, and consider input from various stakeholders, including employee associations. After thorough deliberation, the commission prepares a report detailing its recommendations regarding salary structures, allowances, and pension increments. The entire process can take around 2 years, depending on the complexity of the issues at hand and the commission’s findings,” said Nihal Bhardwaj, Senior Associate, SKV Law Offices told India Today Digital.
He further added that the 7th Pay Commission conducted over 76 meetings with different officers, stakeholders, and public service commissions of other countries before submitting its report.
Once the report is prepared, it is submitted to the government, where the Finance Ministry and other authorities review the recommendations. After approval, the recommendations are implemented through resolutions issued by the Department of Expenditure under the Ministry of Finance.
Implementing a new pay commission involves financial implications. The 7th Pay Commission estimated a financial impact of Rs 1,02,100 crore in FY 2016-17. Salary and pension changes took effect from January 1, 2016, while revised allowances, based on recommendations from a panel led by then Finance Secretary Ashok Lavasa, came into effect on July 1, 2017.
FACTORS FOR SALARY & PENSION HIKE
Pay Commissions consider various factors when making recommendations.
“Inflation adjustment, state of the economy, the market pricing of essential commodities, current DA rate and employee expectations,” said Teamlease Staffing.
Taking into account the above factors, ensures that the revised pay structure addresses both the financial realities of the government and the needs of its employees.
To estimate the revised salary, employees can multiply their current basic pay by the fitment factor, which is expected to be between 2.5 – 2.8 for the 8th Pay Commission.
“Multiply the Basic Pay by 2.5 – 2.8 times,” said Chatterjee.
The Ministry of Finance and the Department of Expenditure play a crucial role in implementing the Pay Commission’s recommendations. The Department of Expenditure evaluates the proposals and issues orders for implementation.
“The Prime Minister, as the head of the government, holds substantial influence over this process, ensuring that the recommendations align with broader governmental policies and fiscal capabilities,” said Bhardwaj.
