8th CPC to reduce number of allowances applicable to employees, pensioners?

The Centre in January announced its decision to form the much-awaited 8th Pay Commission, which is likely to submit its recommendations to the government early next year. As a next step, the Modi government is expected to announce the name of the chairman and two members under the commission next month.

The process of formation of the 8th Central Pay Commission (CPC) is gaining momentum and all stakeholders are now keenly awaiting the members’ appointment. The announcement is expected next month.

Ever since the government has announced the pay panel formation, there have been speculations around the fitment factor to revise salary and pension of employees and pensioners. However, it must be noted that the Pay Commission is not limited to only increasing the salary, but it also reviews the allowances and other facilities given to the central government employees.

In the meantime, various reports suggest that the Commission can eliminate old and irrelevant allowances or include new allowances if needed. Even the 7th Pay Commission removed several allowances, these reports said.

What changes did the 7th Pay Commission make?

The 7th Pay Commission reviewed 196 allowances, out of which only 95 allowances were approved. The 7th Pay Commission rejected 101 allowances. Some of these allowances were completely abolished, some were merged with some other allowance, and some were not included in the report at all.

As regards the salary revision, the 7th Pay Commission recommended a salary hike for central employees with a fitment factor of 2.57, making the minimum salary Rs 18,000 and the maximum salary Rs 2,25,000.

Latest Update on 8th Pay Commission

The terms of reference of the 8th Pay Commission i.e. the framework of functioning, can be decided before April 2025. Along with this, the government can also finalize the names of the chairman and other members of this commission.

Once constituted, the 8th Pay Commission may take about a year to prepare its report. During this time, the commission will discuss with various stakeholders, especially the representatives of the central employees and prepare recommendations after understanding their demands.

Now it remains to be seen how big a benefit the government employees get from the 8th Pay Commission and whether new allowances are added!