The 8th Pay Commission, constituted to review the pay structure of central employees and pensioners, is currently working in action mode. The Commission is continuing its consultation process with stakeholders and employee organizations in different parts of the country. In this series, an important two-day meeting of the Commission is going to be held in Jaipur on 31st August and 1st September. Just before this meeting, the employee organizations have put forward many big proposals before the Commission, of which the most discussed is the demand for doubling the rate of annual increment.
Increment rate should be 6% instead of 3%
At present, under the 7th Pay Commission, government employees are given an annual increment of 3 percent of the basic pay every year. Employee unions argue that a 3 percent increase is inadequate compared to the private sector and considering rising inflation and current economic conditions.
Bharatiya Praksha Mazdoor Sangh (BPMS) in its draft memorandum has demanded to increase the increment rate from 3% directly to 6%. The staff side of the National Council of Joint Consultative Machinery (NCJCM) has also openly supported this proposal. Additionally, the Ministerial Staff Association (MSA), representing the clerk cadre of the Survey of India and the Department of Science and Technology, has suggested increasing the increment to 5% to maintain the morale of employees serving for a long time in the same post.
It is important to understand the difference between DA and increment.
Often there is confusion among employees regarding dearness allowance and increment. Employee organizations have clarified that the purpose of both Dearness Allowance (Dearness Allowance) and annual increment is completely different. The purpose of DA is to compensate for the declining purchasing power due to rising inflation and inflation over time. On the other hand, annual increment is directly related to the employee's experience, length of service in the post and increase in his actual income. For this reason, increasing DA alone cannot be an alternative to salary increase.
How much will be the compounding effect on salary?
In the current salary system, annual increment is added to the basic salary only. This simply means that the next time the increment is given, it is calculated on the increased basic salary.
If the 8th Pay Commission accepts the recommendation of increasing the increment rate from 3 percent to 6 percent, then its impact will be huge on the entire 10-year career cycle of the employees. For example, an entry-level employee with a starting basic pay of Rs 18,000 gets a basic salary of around Rs 24,190 with a 3% increment in 10 years. But if this increment becomes 6%, then after 10 years the basic salary will reach approximately Rs 32,235. This will create a huge difference of more than Rs 8,000 in basic every month.
After this much-awaited meeting in Jaipur, the Commission will hold subsequent sessions in various states and union territories, after which it will submit its final report to the Central Government.