There could be good news for central government employees and pensioners, as the wait for a hike in dearness allowance (DA) and dearness relief (DR) may end soon. According to an NDTV India report, the government is expected to approve the increase in DA and DR, alongside the Terms of Reference (ToR) for the 8th Pay Commission, before Diwali.
The clearance of the ToR will lead to the formal constitution of the 8th Pay Commission, which would then engage with several stakeholders before recommending the fitment factor and other allowances for salary revision. Meanwhile, the DA and DR, intended to offset the impact of inflation, may rise by 3%, which could increase the key allowance from 55% to 58% of the basic pay. This increment will be aligned with the 7th Pay Commission.
Previously, a letter was reportedly sent to Finance Minister Nirmala Sitharaman by the Confederation of Central Government Employees and Workers (CCGEW), expressing ‘discontent’ among employees and pensioners over the delay in the announcement of the DA and DR hike.
8th Pay Commission Setup Soon?
Pay commissions are formed once a decade to revise salaries and pensions. Historical precedence indicates that pay panels typically require around 18 months to submit their recommendations, followed by an additional scrutiny period of three to nine months by the government before the final nod is issued.
The decision to form the 8th Pay Commission was greenlit by the Union Cabinet in January; however, the panel is yet to be formally established. Employee union leaders are currently awaiting the Centre’s clearance for the terms of reference, which will provide the broad framework for the commission.
In recent times, brokerages have suggested that the recommended fitment factor may range between 1.8 to 2.46. The fitment factor, which is crucial for salary revision, is a multiplication unit applied directly to the basic wage. However, it is important to note that the effective salary hike may be lower since the dearness allowance resets to zero once the new pay commission takes effect.
