No proposal currently under consideration for 8th CPC: Govt at Rajya Sabha

The Dearness Allowance (DA) for Central Government Employees is expected to soar beyond 50% by January 2024, potentially surpassing even higher levels. At present, the DA rate is determined based on the recommendations of the 7th Pay Commission. The previous pay commission had suggested that future pay revisions should occur when the DA/DR (Dearness Relief) reaches 50% or exceeds the basic pay, aiming to counteract the impact of inflation. As a result, there have been speculations about the formation of an 8th Central Pay Commission.

However, as of July 25, 2023, the Finance Ministry has clarified that there is no proposal under consideration for the constitution of the 8th Pay Commission, as confirmed by Union Minister of State for Finance, Pankaj Chaudhary. In response to a query in the Rajya Sabha, Chaudhary stated that the Government has not entertained any notion of establishing an Eighth Central Pay Commission for Central Government employees.

The Government justifies the DA and Dearness Relief payments to Central Government employees and pensioners as compensation for the eroding value of their pay and pension due to inflation. The rates of DA/DR are regularly revised every six months based on the All India Consumer Price Index for Industrial Workers (AICIP-IW). As of January 2023, these rates had already been increased to 42% of the pay and pension.

Additionally, Chaudhary clarified that the Government did not consider para 1.22 from the 7th Central Pay Commission (CPS) report, which recommended periodic reviews of the pay matrix for Central Government Employees without waiting for an extended period of 10 years, based on the Aykroyd Formula. The approval for the revision of pay and allowances was given without taking this aspect into account.

In conclusion, the Government has currently not planned the formation of an 8th Pay Commission for Central Government employees, as it stands per the recent statement from the Finance Ministry.