8th Pay Commission Update- The government has officially decided to form the 8th Central Pay Commission (8th CPC) for central government employees. This move will affect the salary structure and pension of lakhs of government employees and pensioners across the country. Central government employees are waiting for the government to announce the formation of a committee to review their salary, pension and other allowances.
Government employees and pensioners are eagerly waiting for the 8th Pay Commission. It is expected that salary and pension will increase according to inflation. Government employees are waiting for a good increase. But, a recent report by Kotak Institutional Equities about the 8th Pay Commission may disappoint government employees.
What does Kotak’s latest report say?
According to a report by Kotak Institutional Equities, central government employees may get an effective salary hike of only 13% under the 8th Pay Commission . This will be less than the 14.3% hike received in the 7th Pay Commission. According to the report, this time the fitment factor is likely to be 1.8. In the 7th Pay Commission it was 2.57. This means that the new basic will be decided by multiplying the existing basic pay by 1.8. However, DA will start from zero. This will result in a relatively lesser increase in the total salary.
Basic pay will increase, but there will be a problem here
The basic salary will increase when the 8th Pay Commission is implemented. For example, if an employee’s current basic pay is Rs 18,000, then it can go up to Rs 32,000 according to the 1.8 factor. But, currently Rs 9,900 (55% of DA) is added to it. This makes the total salary Rs 27,900. This benefit will be limited due to DA reset in the new salary structure.
Similarly, those whose basic pay is Rs 50,000, their new basic can go up to Rs 90,000. However, after removing the existing DA of Rs 27,500, the effective increase will be only from Rs 77,500 to Rs 90,000.
Demand for equality like 7th pay commission
The members of the employee side in the employee union-National Council-Joint Consultative Machinery (JCM) have demanded a fitment factor of 2.57 similar to the 7th Pay Commission. However, according to initial indications, the government is in a mood to keep it low. Experts believe that the increase in basic pay will appear big, but the actual benefit will depend on how DA is incorporated in the new structure.