8th Pay Commission: Centre may merge pay scales for Level 1-6 government employees - check details

The Union Cabinet, led by Prime Minister Narendra Modi on January 16, 2025, approved the establishment of the 8th Pay Commission to review the salaries of nearly 50 lakh central government employees and allowances for 65 lakh pensioners. 

The National Council of Joint Consultative Machinery (JCM) Staff Side has submitted its recommendations for the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), advocating significant changes in pay structure, allowances, and benefits for government employees and pensioners. 

One of the key points of the ToR is the proposal for merging certain pay scales to streamline salary structures and address anomalies in career progression. 

The Department of Personnel and Training (DoPT) recently requested input from the Staff Side of the National Council JCM to finalize the Terms of Reference (ToR) for the 8th Central Pay Commission, following government approval last month for its establishment. 

Shiv Gopal Mishra, Secretary of NC-JCM Staff Side, has presented a comprehensive proposal highlighting key areas in need of attention. A major recommendation put forth by the Staff Side is the consolidation of pay scales for government employees within levels 1-6.

The current pay scale structure consists of 18 levels, ranging from level 1 to level 18. Following the 7th Pay Commission, the minimum monthly pay at level 1 was established at Rs 18,000, with the maximum pay at level 18 set at Rs 2,50,000 per month.

Proposals

1. An important proposal from the Staff Side is to consolidate lower pay scales for equitable remuneration and enhanced career advancement. The suggestion involves merging the following levels: Level 1 and Level 2, Level 3 and Level 4, Level 5 and Level 6.

2. The merger is intended to address discrepancies in pay advancement and establish a clearer salary structure. The suggestion indicates that this consolidation will enhance employee progression by diminishing stagnation and promoting improved financial development in the long run.

3. The Level 1 employee currently receives Rs 18,000 per month as basic pay, while Level 2 receives Rs 19,900. If these levels are merged into one, it will benefit the Level 1 employee more, as the revised pay structure will start from one. After calculating the hike in pay post the 8th pay commission, with an expected fitment factor of up to 2.86, the revised basic pay would increase to Rs 51,480.

Similarly, if Level 3 and Level 4 are merged, the revised salary for employees under the merged pay level would be Rs 72,930.

For employees in Level 5 and 6, the salary may reach up to Rs 1,01,244 based on a 2.86 fitment factor.

4. In addition to the pay scale merger, the Staff Side strongly supports the prompt integration of Dearness Allowance (DA) and Dearness Relief (DR) with basic pay and pension. 

5. The proposal recommends incorporating a specified percentage of DA/DR into the pay structure to boost take-home salaries and pensions, mitigating the effects of inflation on government employees and pensioners.

What's next

The Staff Side has requested the government to convene a Standing Committee Meeting to review the recommendations before finalizing the Terms of Reference for the 8th Central Pay Commission (CPC). If approved, these proposed changes have the potential to provide significant financial relief and introduce structural reforms for numerous government employees and pensioners across various sectors.

It is anticipated that the government will establish an 8th pay panel consisting of three members, with a chairman leading the committee, within this month. The pay commission is slated to present its findings to the government within a timeframe of approximately 12 months. Subsequently, the government will make decisions regarding the revision of pensions and salaries for more than 1.2 crore central government employees and pensioners based on the recommendations put forth by this panel.