New Delhi: The Union Cabinet, led by Prime Minister Narendra Modi, has approved the formation of the 8th Pay Commission, which will revise the pay structure and allowances for 50 lakh central government employees and 65 lakh pensioners. The commission’s recommendations are expected to significantly impact salaries and pensions, boosting disposable incomes across the public sector.
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Key Highlights of the 8th Pay Commission
- Fitment Factor: Reports indicate the fitment factor will be set between 1.92 and 2.86, significantly increasing pay scales.
- Minimum Salary Hike: The minimum basic salary will rise from ₹18,000 per month to ₹51,480 per month.
- Pension Revision: The minimum pension will be revised from ₹9,000 per month to ₹25,740 per month.
The decision is expected to provide substantial financial relief to government employees and pensioners, ensuring their wages align with current economic conditions.
Also Read: 8th Pay Commission: A Look at How Salaries Have Increased Since India’s First CPC
A Look at the Evolution of Pay Commissions
Since India’s independence, successive pay commissions have been established to revise salaries based on economic conditions and inflation.
- 7th Pay Commission (2016): Introduced a pay matrix, replacing the grade pay system, with a minimum salary of ₹18,000 per month.
- 6th Pay Commission (2008): Implemented pay bands and grade pay, increasing the minimum salary to ₹7,000 per month.
- 5th Pay Commission (1997): Focused on modernization, recommending a minimum salary of ₹2,550 per month.
- 4th Pay Commission (1986): Introduced a performance-linked pay structure, with a minimum salary of ₹750 per month.
- 3rd, 2nd, and 1st Pay Commissions also played crucial roles in structuring government pay, adapting to evolving economic needs.
Economic Impact and Reactions
The implementation of the 8th Pay Commission is expected to boost consumer spending, particularly in sectors such as real estate, automobiles, and consumer goods. Labour experts have welcomed the decision, citing improved living standards for government employees.
However, some economists warn that such a large-scale salary revision could lead to inflationary pressure on the economy. Policymakers will closely monitor the financial implications as the commission’s recommendations take effect.
With its approval, the 8th Pay Commission marks a significant step in restructuring government salaries, ensuring fair compensation for public sector employees in line with contemporary economic conditions.