Centre announces constitution of Eighth Pay Commission

Centre announces constitution of Eighth Pay Commission

Sub: Polity

Sec: National body

Context :- The Union Cabinet approved the implementation of the 8th Pay Commission to revise salaries of nearly 50 lakh central government employees and allowances of 65 lakh pensioners. The 8th Pay Commission will not only lead to increased salaries of Central government employees but also have revised Dearness Allowance (DA).

What is Pay Commision?

• A Pay Commission is a government-established body tasked with reviewing and recommending changes in the salary structure, allowances, and other benefits of central government employees and pensioners.
• It aims to ensure fair compensation in line with economic conditions, inflation, and living standards.
• It is not mandatory for the government to accept the recommendations of the pay commission. The government may choose to accept or reject the recommendations.

Mandate of a Pay Commission

The primary mandate of a Pay Commission includes:

• Reviewing the salary structure: Examining the current pay scales and recommending changes to make them competitive and equitable.
• Assessing allowances and benefits: Evaluating allowances like house rent, travel, and medical facilities and recommending revisions.
• Considering pension reforms: Suggesting improvements in pensions for retired employees.
• Analyzing disparities: Addressing anomalies in pay across various cadres and departments.
• Consider the rationalization and simplification of the pay structure to ensure its  coherence and ease of implementation.

Pay Commissions in India

Since India’s independence, seven Pay Commissions have been constituted to date.

• 1st Pay Commission (1946):
  • Chairman: Srinivasa Varadacharia
  • Established before independence; recommendations implemented in 1947.Introduced the concept of the “living wage”
• 2nd Pay Commission (1957):
  • Chairman: Jaganath Das
  • Addressed disparities and inflation post-independence.
• 3rd Pay Commission (1973):
  •  Chairman: Raghubir Dayal
  • Focused on equitable distribution of pay.
• 4th Pay Commission (1986):
  • Chairman: P.N. Singhal
  •  Focused on reducing disparities in salaries across rank and Introduced a performance-linked pay structure.
• 5th Pay Commission (1996):
  •  Chairman: Justice S. Ratnavel Pandian
  •  Recommended substantial hikes in government salaries.
• 6th Pay Commission (2006):
  •  Chairman: Justice B.N. Srikrishna
  •  Introduced Pay Bands and Grade Pay system.
• 7th Pay Commission (2016):
  • Chairman: Justice A K Mathur
  • Recommended abolishing the Pay Band and Grade Pay system, replacing it with a new pay matrix based on Aykroyd Formula.