Lakhs of families of central employees are eagerly waiting for the notification of the Eighth Pay Commission. These days, all eyes are on the final notification, which will clear the whole picture of the Eighth Pay Commission. The Pay Commission not only increases the salary every time, but also reviews the allowances. This is why the big question among the employees is whether many existing allowances will be abolished in the new Pay Commission.
What did the Seventh Pay Commission do
The previous Seventh Pay Commission (7th CPC) found in its review that central employees get about 196 types of allowances. Many of these were no longer effective. The commission had recommended the abolition of 52 allowances and the merger of 36 allowances with other allowances. After this, the government abolished many allowances completely, while implementing some by giving them a new name and structure. Its main objective was to make the salary structure of the employees simpler and transparent.
What are the expectations from the Eighth Pay Commission
R.K. Verma, general secretary of the Joint Employees Council, says that the Eighth Pay Commission may also follow the same path. Its focus may be on ‘less allowances, but more transparency’. That is, those allowances can be removed that have now become irrelevant due to digitalization and new administrative systems. Apart from this, allowances of the same nature can be merged. Basic salary and dearness allowance (DA) can be given more importance in the salary package of employees, while minor allowances can be removed.
Which allowances can be affected
Although there has been no official announcement yet, it is expected that travel allowance, special duty allowance, small-level regional allowances, and some departmental allowances (such as old-fashioned typing/clerical allowance) can be abolished. The government wants the salary structure of employees to look logical and simple, so that duplication and confusion are eliminated.
No cut in salary, but a benefit in pension
The reduction in allowances does not mean that the income of the employees will decrease. The government usually makes such a balance that the basic salary and dearness allowance (DA) are increased. This not only does not affect the income of the employees, but also has a positive effect on their pension. Keep in mind that the pension is calculated on basic salary and dearness allowance (DA), not on separate allowances.
Current status of the Eighth Pay Commission
The central government had announced the Eighth Pay Commission in January 2025, but till now, its process is incomplete. The ‘Terms of Reference’ (ToR) for the commission is yet to be decided. Only after the ToR is decided, the commission will be able to formally start work, and its chairman and members will be appointed. It was believed that this process would be completed before April 2025, but till now, the government has kept silent on it.