Good news may soon arrive for central government employees and pensioners. After a long wait, the government is expected to approve a hike in dearness allowance (DA) and dearness relief (DR).
In a major announcement, the government may also approve the Terms of Reference (ToR) of the 8th Pay Commission before Diwali, according to a report by NDTV India.
will be formally constituted
It should be noted that after the approval of the Terms of Reference, the 8th Pay Commission will be formally constituted. The Commission will then hold discussions with various stakeholders and present recommendations regarding the fitment factor and other allowances for pay revision. According to reports, dearness allowance (DA) and dearness relief (DR) may be increased by up to 3% this time to provide inflation relief. This will increase the allowance from 55% to 58% of the basic pay. This increase will be implemented in line with the recommendations of the 7th Pay Commission. Although the government has not yet made any official announcement, the potential increase will benefit over 12 million central employees and pensioners.
Delay in DA-DR increased dissatisfaction
Discontent is growing among central government employees and pensioners over the delay in announcing dearness allowance (DA) and dearness relief (DR). The Confederation of Central Government Employees and Workers (CCGEW) reportedly wrote a letter to Finance Minister Nirmala Sitharaman expressing their displeasure.
Preparation for the 8th Pay Commission
Based on past experience, a Pay Commission is constituted every ten years to review salaries and pensions. Typically, the Pay Commission takes approximately 18 months to submit its recommendations, after which the government examines them for three to nine months and then gives final approval. In January, the Union Cabinet approved the formation of the 8th Pay Commission, but its formal formation is still pending. Leaders of employee unions are now awaiting the approval of the Terms of Reference (ToR), which will outline the commission’s work.
Speculation on the fitment factor
Recently, brokerage firms have estimated that the 8th Pay Commission may recommend a fitment factor between 1.8 and 2.46. The fitment factor is the coefficient by which the basic salary is multiplied to determine the new salary. However, it’s worth noting that after the implementation of the new Pay Commission, dearness allowance (DA) starts at zero, making the actual salary increase appear slightly lower.
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