8th Pay Commission News: Central government employees and pensioners were hopeful that Finance Minister Nirmala Sitharaman would announce the establishment of the 8th Pay Commission in the Union Budget. This commission is expected to be implemented from January 2026, following the trend of introducing a new pay commission every ten years.

Ahead of the Union Budget 2024-25, presented in Parliament on July 23, various media reports speculated that the Centre might announce the formation of the 8th Pay Commission in the budget. However, this did not happen. It was also anticipated that the government might announce 50% of the last-drawn salary as a pension under the New Pension System (NPS) for government employees, who have been demanding the scrapping of the NPS and the restoration of the Old Pension Scheme (OPS). Ultimately, there were no developments on these two fronts for central government employees.

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Although there were no announcements in the Budget, Union Finance Secretary T V Somanathan, in a post-Budget interview, indicated that the government might make a decision on the matter in the near future. In an interview with a TV channel, Somanathan said that the next pay commission is due in 2026 and that there is still time, as we are currently in 2024.

“8th Pay Commission is due on January 1, 2026. We are currently in 2024. There is time for it,” Somanathan said.

The secretary’s statement would give hope to more than 1 crore central government employees and pensioners, who have been eagerly awaiting a revision in their salary and pension following the implementation of the pay commission.

Representations for 8th Central Pay Commission received in June 2024

Last month, in a written reply in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary stated that two representations were received in June 2024 for the establishment of the 8th Central Pay Commission. However, he clarified that no such proposal is currently under consideration by the government.

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NPS Vs OPS debate: Will govt restore OPS?

Following pension reforms implemented 20 years ago by the then NDA government, all central government employees (except those in the armed forces) who joined their services after April 2004 are covered under the New Pension System (NPS). This reform replaced the Old Pension Scheme (OPS). Since then, many states have restored the OPS, and numerous others have been advocating for the reinstatement of the old pension system.

There is a fundamental difference between the NPS and OPS, as highlighted by employees advocating for the restoration of the OPS. Under the OPS, retirees receive a guaranteed pension amounting to 50% of their last-drawn salary for their lifetime. In contrast, the NPS requires government employees to contribute towards their pension from their monthly salary, with a matching contribution from the employer. The funds are then invested in designated investment schemes through Pension Fund Managers.