8th Pay Commission: Recommending Incentive Scheme To Reviewing NPS, UPS-Linked Gratuity — ToR Details Out

The details of the Terms of Reference (ToR) for the 8th Pay Commission, which were approved by the Union Cabinet last week, have been released. The ToR will serve as a broad framework for the panel, which is being headed by Justice (retired) Ranjana Desai.

The ToR for the commission includes the examination of "existing schemes of bonus with a view to improving performance and productivity".

The panel will also be required to make recommendations on the general principles, financial parameters, productivity and performance-linked parameters for an appropriate incentive scheme to reward excellence in productivity and performance.

As per the ToR, the commission is set to review the Death-cum-Retirement Gratuity of employees under the National Pension System, including Unified Pension Scheme as they make recommendations thereon.

They are to also review the Death-cum-Retirement Gratuity and pensions of employees not borne on the National Pension System and the Unified Pension Scheme to make recommendations, keeping the likely impact of modifications in mind.

Notably, the UPS or the Unifed Pension Scheme, assuring fixed pension to retiring employees as against the NPS, was introduced last year. On the other hand, the NPS can potentially offer higher pensions but come with a market-linked risk.

The 8th Pay Commission is also required to work out an emolument structure that is conducive to attracting talent to government service. This should further promote efficiency, accountability and responsibility in the work culture.

These modifications and changes are set to apply to central government employees, both industrial and non-industrial along with personnel belonging to the All India Services.

Personnel belonging to the Defence Forces, personnel of the Union Territories, officers and employees of the Indian Audit and Accounts Department will come under the list of employees this applies to.

Members of the regulatory bodies, excluding the RBI, set up under the Acts of Parliament, officers and employees of the Supreme Court, officers and employees of the High Courts whose expenditure is borne by the Union Territories and Judicial officers of the subordinate courts in the Union Territories will also be on the list of employees these changes are set to apply to.

The commission is set to make recommendations on the above, keeping in view the economic conditions in the country and the need for fiscal prudence along with the need to ensure that adequate resources are available for developmental expenditure and welfare measures.

It needs to consider the unfunded cost of non-contributory pension schemes and the likely impact of the recommendations on the finances of the State Governments which usually adopt the recommendations with some modifications.

The commission will also need to keep in mind the prevailing emolument structure, benefits and working conditions available to employees of Central Public Sector Undertakings and private sector.

It was also disclosed that the commission will now devise its own procedure and may appoint such advisors, institutional consultants and experts, as it may consider necessary for any particular purpose.

It may also call for such information and take such evidence, as it may consider necessary. Further, ministries and departments of Government of India are required to provide such information and documents and other assistance as may be required by the commission.

According to the notification, the commission will make its recommendations within 18 months of the date of its constitution.