(Image source from: Canva.com)
The Union Cabinet led by Prime Minister Narendra Modi approved the constitution of the 8th Pay Commission on January 16, 2025. The move comes days before the Delhi assembly elections and promises to increase the income of public sector workers. To express his support for government employees, Prime Minister Modi took to X (ex-Twitter) and wrote, "Cabinet's decision on 8th Pay Commission will improve quality of life and boost consumption." The announcement comes months after the Dignity Allowance (DA) for central government employees has exceeded 50 percent of their basic salary. From July 1, 2024, both central government employees and pensioners will receive 53% of their basic salary as DA/Relief, with the next revision scheduled for January 2025.
The salary structure currently corresponds to the recommendations of the 7th Pay Commission, which came into force on January 1, 2016. With the formation of the eighth payment commission, the payment structure will be revised. Although the exact percentage increase was not disclosed, the report suggested that the matching factor, a key coefficient in determining wages and pensions, could rise from 2.57 to 2.86. In this case, the minimum basic salary for civil servants could increase significantly from Rs 18,000 to Rs 51,480. The compliance factor is an important factor in calculating salary adjustment and pension amounts for central government employees. This will serve as a multiplier to adjust wage levels in accordance with the new Commission's recommendations. In the 7th Pay Commission, the merit ratio was 2.57 and the minimum basic wage for central government employees was increased from Rs 7,000 to Rs 18,000 in the 6th Pay Commission. The base salary does not include bonuses, allowances or performance pay. Taking into account the Dearness Allowance (DA), House Rent Allowance (HRA), Transport Allowance (TA) and other benefits, the overall minimum wage has been increased to Rs 36,020 per month under the 7th Pay Commission.
Currently, various allowances are subject to change depending on the final instructions of the 8th Pay Commission. The latest change is expected to significantly increase the salaries of central government employees.
