The government has approved the formation of the 8th Pay Commission. It will review the salary, allowances, pension, and other benefits of central employees and recommend a hike in salary accordingly. This pay commission will submit its report by the year 2026. The formation of the 8th Pay Commission was approved in a cabinet meeting led by PM Narendra Modi. Let us know what is a pay commission, how it is formed, and which central employees get its benefits.

What is a Pay Commission?

The Pay Commission is a high-level committee. It is constituted by the central government. The most recent Pay Commission was constituted in 2014 and its recommendations were implemented in 2016. The purpose of the Pay Commission is to ensure that employees get a fair salary to live with dignity according to the economic conditions. It recommends reforms for the economic welfare of government employees. It includes employee welfare policies, pensions, allowances, and other benefits.

How is a Pay Commission constituted?

The Pay Commission is usually constituted once every 10 years. However, this is not a necessary restriction. The government can form it before or after 10 years keeping in mind the economic aspects. The pay commission can be formed during the tenure of any government as per the need. Its head can be a judge or any other high-ranking officer. Its other members are experts in areas such as salary, finance, economics, and human resource management.

Which employees will not get the benefit?

According to the 7th Pay Commission, all those employees coming under the purview of the civil services come under the purview of the Pay Commission, who get salaries from the consolidated fund of the country. At the same time, employees of Public Sector Undertakings (PSUs) autonomous bodies and rural postal workers do not come under the purview of the Pay Commission. Some special employees, such as judges of the High Court and Supreme Court, also remain outside the purview of the Pay Commission. Their salaries and allowances are decided under different rules and laws.

How is the formula for increasing salary decided?

The Pay Commission considers many aspects for increasing the salary of employees. These focus more on inflation and the financial condition of the country.

Inflation rate: The Pay Commission pays more attention to the inflation rate, how much it has increased and what effect it has had on the lifestyle of the employees. It gives its recommendations accordingly.

Economy situation: The government also considers the financial condition of the country. If the economy is in good condition, then there is scope for a better increase in salary.

Performance of employees: The Pay Commission also takes into account the working performance of the employees. If their working capacity and productivity has increased, then its effect is seen on the recommendations of the Pay Commission.

Market salaries: The Pay Commission also looks at how much private companies are increasing the salaries of their employees. This makes it easier for private employees to fix competitive salaries.

What kind of recommendations does the Pay Commission make?

Increase in the existing salary of employees
Improvement in the pension scheme
Increase in allowances (affordable housing, transport allowance, medical allowance etc.)
Improvement in working conditions
Improvement in the recruitment process and salary structure for new employees
Recommendations for training programs for employees

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