The government has no immediate plans to establish the eighth Pay Commission, Finance Secretary TV Somanathan confirmed on Thursday. This decision comes as no surprise, as it is not due at present and the government has shown no prior indication of setting it up.
Historically, governments have used Pay Commissions as a tool to appease government employees and armed forces personnel in the lead-up to elections. However, the current administration has chosen to focus on revising the contentious New Pension Scheme (NPS).
The NPS requires employees to contribute 10% of their salary, while the government contributes 14%. This has been met with opposition, leading several states to revert to the old pension scheme, which guarantees a 50% monthly pension based on the last drawn salary.
Following consultations with stakeholders, a committee headed by the Finance Secretary is finalizing a report on potential changes to the NPS. These changes are likely to ensure employees receive at least 40-45% of their last salary in retirement.
Despite approaching elections, the government has resisted pressure to announce the 8th Pay Commission. This decision may be influenced by the upcoming state poll results, which are seen as a precursor to the 2024 national elections.
