Limited changes to the Dearness Allowance; no plans to establish an 8th pay commission

The state minister for finance, told the Lok Sabha on Monday that the establishment of the 8th
Pay Commission for central government employees is not something the administration is
contemplating.

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In response to a question about how the government intended to ensure that the 8th Central
Pay Commission for central government employees would be established in time to take effect
on January 1, 2026, Chaudhary stated in a written response that “no such proposal is under
consideration by the government.”


He explained that dearness allowances (DA), which are paid to employees of the government to
make up for the loss in the real value of their salaries as a result of inflation, are periodically
adjusted every six months based on the rate of inflation as measured by the All India Consumer
Price Index for Industrial Workers published by the Labour Bureau.


In February 2014, the 7th Pay Commission was established by the government. The panel’s
suggestions took effect on January 1st, 2016.


What is a Pay Commission?


The government has established the Pay Commission as a body to provide suggestions for
adjustments to the pay scale for public servants. It was first established in January 1946, and
Srinivasa Varadachariar served as its chairman. Its report was presented in May 1947.


Typically, the commission has 18 months to present its recommendations. It examines the wage
system of both the civil and military branches of the Indian government and offers
recommendations. Its main office is in Delhi.


The suggestions are based on a number of variables. In the report of the commission, the
dearness allowance (DA), fitment factor, and basic pay are examined.


The 7th Pay Commission was introduced in 2013, according to the then-finance minister, P
Chidambaram. To lead the commission, Justice AK Mathur was selected.


The Narendra Moda administration agreed to the commission’s recommendations on June 29,2016, raising staff salaries by 14%.

Additionally, beginning November 9, 2017, government personnel can now borrow up to 2.5
million rupees instead of the previous 7.5 lakh, which was the highest amount allowed. 8.5
percent was decided upon as the interest rate for the borrowed money.


According to the 7th Pay Commission’s recommendations, armed services should have their
own pay matrix and allowance systems.

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