8th Pay Commission: Future Salary Revisions Linked To DA Hike On Wishlist

With the 8th Pay Commission's formation receiving the government's nod, the focus has now shifted on the expectations from the panel. Some of the key stakeholders who will be involved in the deliberations want subsequent revisions in basic pay to be linked with dearness allowance hike.

If the demand is accepted, then the 8th Pay Commission would be reinstating the rule on DA that was last implemented during the tenure of 5th Pay Commission.

The 5th Pay Commission, whose tenure lasted from 1996 to 2006, had recommended the merger of DA with basic salary if the allowance increased by 50% from the base level.

In accordance with this recommendation, the government had allowed the merger of 50% DA with basic pay with effect from April 1, 2004.

The 5th Pay Commission was of the view that the merger of basic pay with 50% DA, combined with the once-in-a-decade formation of pay commissions, would address the central government employees' demand for more frequent salary revisions.

However, the 6th Pay Commission, whose tenure lasted from 2006 to 2016, did not recommend its continuation. When the 7th Pay Commission was announced, employee unions had demanded reinstatement of the 5th pay panel's rule on DA.

"The 7th Pay Commission had proposed that basic wage should be revised through merger with DA once the allowance rises by 50%. But that proposal was not approved by the government," Shiv Gopal Mishra, general secretary of the All India Railwaymen's Federation, told NDTV Profit.

If that recommendation was accepted, then salaries of central government employees would have already been eligible for revision as DA crossed the 50% mark last year, Mishra explained.

A senior official of the Confederation of Central Government Employees and Workers said, during an earlier conversation with NDTV Profit, that the 8th Pay Commission is expected to recommend the merger of DA into basic pay once it rises by 50%.

"The 7th Pay Commission had made this proposal, but it was not accepted by the government. However, it is expected that the 8th Pay Commission will recommend the same," the official said.

Mishra is also of the view that the 8th Pay Commission should recommend the revision of basic wages through the merger of DA into it, once the allowance crosses 50% of the base level. This should be done in view of the inflationary trends, he suggested.

Notably, DA is paid to government employees to offset the impact of inflation. With the last increase of 3% in October, the allowance rose to 53%.

The allowance is generally revised in the range of 2% to 4% every six months. However, it was increased sharply from 17% to 28% in July 2021, after being kept unchanged for around 18 months due to the Covid-19 outbreak.

Once the 8th Pay Commission comes into effect, the DA would be reset to zero. As per the precedent, it would be raised biannually thereafter.

The National Federation of Indian Railwaymen has been of of the view that the biannual increase in DA in recent years has not been able to raise the minimum living wage to the level mandated under Dr Aykroyd's formula.

The formula is linked to 20th-century American nutritionist Wallace R Aykroyd. It takes into consideration the increase in prices of various commodities that constitute a common person's basket, which is reviewed periodically by the Labour Bureau in Shimla.

The 7th Pay Commission had relied on Dr Aykroyd's formula to revise the minimum salary to Rs 18,000 in 2016.

NFIR General Secretary M Raghavaiah had appealed to Prime Minister Narendra Modi in August last year to raise the minimum salary to Rs 32,500. This, he claimed, was in accordance with Dr Aykroyd's formula.

At that time, the appeal was made to immediately revise the minimum salary, even before forming the 8th Pay Commission.

With the 8th Pay Commission's formation now being approved, Raghavaiah said he expects a minimum wage of Rs 36,000 to be recommended, instead of Rs 32,500, taking into consideration the current pace of inflation.