Eighth Pay Commission
With the 8th Pay Commission process gaining momentum, employee representatives have started putting forward their demands and some of these demands can significantly change the salary structure, allowances and pension benefits of central government employees. In its latest memorandum submitted to the 8th Pay Commission, the staff side of the National Council Joint Consultative Mechanism (NC-JCM) has proposed sweeping changes in allowances — including merging Dearness Allowance (DA) with basic pay at 25 per cent, tripling many benefits and linking them more tightly to inflation. Let us also tell you what demands the employee side has put forward.
Merger of DA at 25 percent
One of the most important proposals is that when DA (and DR for pensioners) exceeds 25 percent, it should be merged with basic pension. At present, DA/DR is at 60 percent. The Central Government has recently increased this important allowance by 2 percent.
The memorandum said that prices should be calculated on the basis of market rates and not on the basis of government rates, which can vary by up to 25 percent. We have proposed that the 8th CPC should recommend that if DA/DR exceeds 25 per cent, it should be merged with basic pay and basic pension.
This is important because currently DA is changed twice a year to compensate for inflation. By merging it with the basic salary, the base of salary and pension can increase forever. This may also impact other components like HRA, gratuity and retirement benefits.
The employee side has argued that DA should be completely linked to inflation, but to avoid any irregularities in the salary structure, it should also be mixed with the basic salary from time to time.
Why is there a demand for change in DA calculation?
The shortcomings of the existing system have been pointed out in the memorandum.
- The Consumer Price Index (CPI) may not reflect the actual spending patterns of government employees.
- The current 12-month averaging approach reflects the real impact of inflation late.
- Proposal: Shifting to an average of 6 months (which is according to the change in DA).
- Suggestion to use market prices instead of government fixed rates.
Change in HRA: Up to 40 percent of basic salary
In view of the rising housing expenditure, a major change in the House Rent Allowance (HRA) has been proposed:
X City (50 lakh+ population): 40 percent of basic pay
Y city: 35 percent
Z city: 30 percent
Additionally, the memorandum suggested that HRA be linked to DA so that it changes automatically, and the classification of cities be reviewed every 5 years. HRA has also been suggested for pensioners — this is a big new demand.
3 times increase in many allowances
The staff side has proposed tripling several allowances citing rising cost of living:
- Transport Allowance → 3 times increase
- Daily Allowance (Travel) → 3 times increase
- Patient Care/Nursing Allowance → 3 times increase
- Uniform Allowance → 3 times increase
- There is also a proposal to link most of these with DA, so that changes can be made automatically according to inflation.
- Risk and Difficulty Allowance: Minimum of Rs 10,000/month
- For employees in high-risk roles:
- Railways, Defence, Healthcare, Sanitation, Fire Services
- The demand is that at least Rs 10,000 per month should be given as risk and hardship allowance, and it should be linked to DA for increase from time to time.
Should air travel be allowed for everyone on duty?
a specific operational demand
All employees on official duty should be allowed to travel by air.
AC taxis should be allowed for road travel.
Reason: Traveling at the last minute often makes it difficult to get reservation in trains.
Compensation for overtime and additional duties
The following points are emphasized in the memorandum:
Working hours increase due to shortage of employees.
Many employees do not receive overtime compensation.
Proposal:
Employees outside the scope of the Factory Act should get overtime at a single rate (basic pay + DA). There should be a major change in benefits related to education and children. Children's Education Allowance (CEA) should be Rs 10,000/month for each child. Hostel subsidy should be Rs 35,000 per month. Its scope has been extended to post-graduation and professional courses. More benefits for disabled children.
Other main demands
Additional merit allowance → 10 percent of basic salary
Cooking allowance → should be increased to Rs 3,000 per month
Sports promotion → Limit on salary increment should be removed
Night Duty Allowance → No upper limit on basic pay
What is the status of the 8th Pay Commission now?
Last year, the government had released the 'Terms and Conditions' (ToR) for the 8th Pay Commission, paving the way for review of the salary structure, revision of allowances and changes related to pension. Although the Commission's recommendations are still awaited, memorandums like this give an indication of what workers are demanding from UNISON.
If these proposals are accepted, what changes might occur?
If implemented, these proposals could result in an increase in basic salary due to the merger of DA, a significant increase in monthly take-home pay, better inflation protection through DA-linked allowances, and improved benefits for pensioners. However, the final decisions will depend on the recommendations of the Pay Commission and the approval of the government.
