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8th Pay Commission: The 8th Pay Commission is expected to place a heavy burden on the government exchequer due to the large number of employees and pensioners involved, as well as the significant demands being raised by them.

8th Pay Commission Salary Hike: On October 28, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the 'Terms of Reference' for the 8th Central Pay Commission (CPC). Additionally, the government has issued the notification for the constitution of the new CPC. The Commission is required to submit its recommendations to the government within 18 months of its formation. Approximately 50 lakh central government employees (including defense service personnel) and around 69 lakh pensioners will benefit from the 8th Pay Commission.

Why is the 8th Pay Commission the costliest?

It is reported that the 8th Pay Commission will be the most expensive salary revision in India's history. This is because the substantial increase in the number of employees and pensioners, combined with demands for major changes to the fitment factor and allowances, is expected to impose the heaviest financial burden on the government exchequer to date. The salary revision under the 8th Pay Commission will impact over 1.2 crore families, comprising more than 50 lakh central government employees and over 65 lakh pensioners.

Currently, the minimum basic salary under the 7th Pay Commission is ₹18,000. For the 8th Pay Commission, various employee unions have demanded an increase in the fitment factor ranging from 1.92 to 3.83 times. Organizations such as the Bharatiya Pratiraksha Mazdoor Sangh have even proposed raising the minimum basic salary from ₹18,000 to ₹72,000 (a four-fold increase in the fitment factor). Proposal to Increase Allowances

Organizations such as the All India NPS Employees Federation have demanded an increase in House Rent Allowance (HRA) from the current rates of 30%, 20%, and 10% to 36%, 24%, and 12%, respectively, citing the rising cost of living in major cities. Since all allowances are determined based on the basic salary, any hike in the basic salary will automatically lead to an increase in expenditure on allowances. Recent reports indicate that the total expenditure on increased salaries and pensions under the 8th Pay Commission could exceed ₹4 lakh crore. Including arrears from approximately the last five quarters, the total financial burden could reach nearly ₹9 lakh crore, potentially making this the most expensive salary revision to date.