As the festive season approaches, the Modi government is preparing a double delight for central government employees. According to official sources, three major announcements are expected to be made ahead of Diwali – formation of the 8th Pay Commission, an increase in Dearness Allowance (DA), and a special Diwali bonus.
These measures are likely to benefit millions of employees and pensioners, while also giving a boost to consumer demand during the festive months.
8th Pay Commission Likely to Be Set Up Soon
The Union government is considering setting up the 8th Pay Commission, which will be responsible for recommending salary revisions for central employees. The last major salary restructuring took place under the 7th Pay Commission. Employees’ associations have long been demanding the formation of a new panel to address pay discrepancies and align salaries with inflation and cost of living.
Reports suggest that the government may soon announce the names of the members who will constitute the new commission. This move will not only assure employees of future salary improvements but also signal the government’s commitment to welfare-oriented reforms.
Dearness Allowance Hike on the Cards
Along with the pay commission announcement, the Centre is also expected to increase Dearness Allowance by 2 to 3 percent. DA is revised twice a year to offset the impact of inflation on employees’ salaries. A hike in DA will immediately improve take-home pay for central employees and will also benefit pensioners, as dearness relief (DR) is directly linked to DA.
If the hike is approved, it will bring much-needed financial relief during a time when inflation has been affecting household budgets. With festivals like Diwali leading to increased expenditure, this increment will boost both morale and spending power.
Diwali Bonus for Central Employees
Another big announcement under consideration is a Diwali bonus for eligible central government staff. Sources indicate that the bonus will be linked to productivity and performance, similar to the model followed in previous years. The bonus is expected to cover Group C and non-gazetted employees in Group B, who form the backbone of government operations.
Such festive season incentives not only reward employees for their contribution but also stimulate demand in the market. Analysts believe this will positively impact sectors such as retail, consumer goods, and services during the festive rush.
Pension Schemes Under Review
Alongside salary-related announcements, the government is also reviewing existing pension schemes, including NPS (National Pension System), UPS, and OPS (Old Pension Scheme). Discussions are ongoing to simplify these frameworks and address long-standing employee concerns. Pension-related reforms, if implemented, could provide better financial security for retirees in the future.
Relief Measures for Auto and EV Sector
Beyond salary and pension benefits, the Modi government is also pushing reforms in the automobile sector. Recent policy changes indicate that small cars will receive greater tax concessions, while hybrid and flex-fuel vehicles will be incentivized further. Additionally, under the revised CAF norms, electric vehicles (EVs) will enjoy enhanced benefits, boosting India’s push toward cleaner mobility.
Broader Economic Context
These developments come at a time when the government has already implemented GST reforms, making over 370 essential and consumer products cheaper. The middle class has been one of the biggest beneficiaries of these changes, enjoying lower prices across categories.
However, global trade concerns also loom large. Former US President Donald Trump has ordered a 100% tariff on pharmaceutical products in the American market. This decision is expected to impact India’s pharmaceutical exports, which form a significant share of the country’s foreign trade.
What It Means for Employees and the Economy
If these announcements are made before Diwali, it would mean higher disposable incomes for government employees, better pension security, and increased festive spending. Economists believe such measures could drive short-term demand in the economy and support sectors like real estate, consumer goods, automobiles, and retail.
Overall, the Modi government’s festive package seems aimed at striking a balance between employee welfare and economic growth, ensuring both central staff and the middle class feel the positive impact during the festival season.