8th pay commission
A very big and relief news is coming for central employees and pensioners. Discussions regarding the long awaited 8th Pay Commission have intensified. Amidst the continuous demands made by the employee unions, a new formula for salary hike has emerged under the New Pay Commission, which can take the take-home salary of government employees to a new level.
ET reports, in the 8th Pay Commission, there may be a huge increase of up to 65 percent in the basic salary of the employees. Along with this, after the changes in Dearness Allowance (DA) merger, House Rent Allowance (HRA) and Traveling Allowance (TA), there is expected to be a bumper jump in the salary of entry-level employees, especially Level-1. Let us understand how the salary mathematics is going to change in the proposed 8th Pay Commission as compared to the 7th Pay Commission and what formula can be adopted for this.
Why employee unions are demanding major changes
Several organizations representing central government employees and pensioners have urged the 8th Pay Commission to make changes in HRA, transport allowance, family unit rules and dearness allowance (DA). They argue that the current salary structure no longer accurately reflects the cost of living, especially in big cities where household and everyday expenses have increased significantly.
How can basic pay increase due to having a large family?
In the current salary structure, a family is considered a unit of three members. AINPSEF has proposed to increase it to 4.4 units by including dependent parents. According to the Federation, this may increase the fitment factor from approximately 2.05 to 2.10, which will significantly increase the revised basic salary of Level 1 employees.
What kind of changes are the employee organizations demanding in HRA?
Most of the employee organizations have demanded significantly higher House Rent Allowance (HRA) under the 8th Pay Commission. While AINPSEF has proposed HRA of 36%, 24% and 12% for X, Y and Z cities respectively, other organizations have recommended even higher slabs of 40%, 35% and 30% linked to future DA hikes.
Why is there demand for more TPTA?
Employee unions believe that the current transport allowance is inadequate, especially in metro cities. AINPSEF has proposed a minimum TPTA of Rs 9,000 for Level 1 employees, while several other organizations have recommended tripling the current allowance and linking future increases with dearness allowance.
Why do employee unions want to merge DA with basic pay?
Many employee organizations have recommended merging Dearness Allowance (DA) with basic pay when it reaches 25%. They argue that this will provide a strong basis for future salary revision, calculation of allowances and pension and will also keep pace with salary inflation.
Current vs Proposed Salary for Level 1 Employees?
At present, a Level 1 employee in an X-category city gets a gross monthly salary of around Rs 37,080, which includes basic pay, DA, HRA and transport allowance. Under the proposal of AINPSEF, after implementing the fitment factor of 2.10, higher HRA and revised TPTA, the total salary (gross salary) may increase to approximately Rs 61,344.
How is the proposed increase of 65% calculated?
This estimated increase is based on several factors—fitment factor of 2.10, 36 percent HRA, transport allowance of Rs 9,000 and 2 percent DA on the revised basic pay. With these changes, the estimated total salary increases from Rs 37,080 to Rs 61,344, which is an overall increase of about 65 percent.
Which employee organizations support these changes?
These proposals have come from organizations like AINPSEF, NC-JCM Staff Side, AIDEF, FNPO and IRTSA. Although each organization has different recommendations on HRA, transport allowance and family units, most agree that the current pay structure should be changed to take into account inflation and rising cost of living.
Are these proposals for salary increase final?
No. These are recommendations given by employee organizations and the government has not yet accepted them. The 8th Pay Commission is yet to finalize its report, and the government will take the final decision on fitment factor, HRA, transport allowance, DA merger and other changes in salaries.
What will happen next and when can it be implemented?
Generally the recommendations of pay commissions take time to be implemented. However, organizations associated with central employees are continuously putting pressure on the government that the official announcement of the formation of the 8th Pay Commission should be made as soon as possible. If the government prepares its blueprint by the end of this year or the beginning of next year, then huge financial benefits will be seen in the accounts of more than 1 crore central employees and pensioners of the country. This change in the salary structure will not only increase the purchasing power of the employees, but will also give a new impetus to consumption and retail spending in the Indian economy.
