8th Pay Commission Not on the Horizon, Affirms Central Government

The Indian government has confirmed that there are currently no plans to establish the eighth Pay Commission for the approximately 5.4 million central government employees and pensioners.

This announcement comes ahead of the upcoming national elections next year, as stated by Finance Secretary TV Somanathan.

Somanathan clarified on Thursday that there are no immediate intentions to initiate the process for the 8th Pay Commission. Historically, in the lead-up to elections, governments have utilized the establishment or implementation of Pay Commissions to garner support from central government employees, armed forces personnel, and family pensioners. The 7th Pay Commission was instituted by the Congress-led UPA government in September 2013, strategically timed before state and general elections.

In contrast, the BJP government has chosen a different approach, steering clear of such a move. Instead, their focus has been on reviewing a new pension scheme that has become a contentious issue for both new state and central government employees.

The existing scheme involves employees contributing 10% of their basic salary, with the government contributing 14%. This has led to political debate, prompting some opposition-ruled states to revert to the old pension scheme, ensuring pensioners receive 50% of their last drawn salary monthly without any employee contribution. To address this, the government established a committee led by the Finance Secretary to review the system.

Somanathan stated that consultations with all stakeholders have been completed, and the committee's report is expected to be submitted soon. There is speculation that changes may be introduced to guarantee employees receive at least 40 to 45% of their last salary.

As the elections draw near, there is growing political pressure on the Finance Ministry to announce and implement the 8th Pay Commission.

This pressure remains irrespective of the outcomes of the upcoming state poll results, which are widely considered a semi-final ahead of the 2024 national election, where Prime Minister Narendra Modi will be seeking a third consecutive term.

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