This festive season many of the central employees and pensioners in India are to hear positive news. It shows that the government is willing and has plans to provide its employees with a major monetary bonus to their present wages with two major advantages.
First, Dearness Allowance (DA) hike of approximately 3% to 4% may be expected to be declared by the third week of September 2024. Earlier in March 2024, the DA was increased by 4% making it 50% up from 46%. Given to cover cost of inflation, DA and Dearness Relief (DR) are usually changed in the month of January and July.
But the most important hope this Diwali, is the much awaited revision in the basic pay structure which the government is thought to be contemplating. This has been one of the biggest demands that the central employees have been putting across for the past few years, and it seems the government is ready to meet this demand.
Salary Hike
Government is expecting to fulfil this demand by Diwali and there will be hike in basic salaries for the central employees. This adjustment will come after previous alterations that have been made owing to advice from past central pay commissions. The salary increase will be music to the ears of many workers with the hope of no progress concerning the 8th Pay Commission.
Central Employees to request for a salary increase.
The inflation rate has been a continuous increase while the central employees have demanded an increase in their remunerations in a bid to have a better future. The Open pocket associations have demanded a hike in the basic salary by the employees and more than five million employees in the country have been resorting to this aspect for years.
While there was a sense of let down when the Union Budget did not factor this, indications from the Ministry of Finance indicate that the government is now in agreement with a salary rise that could be given as a Diwali bonus.
What this Means to a Firm when there is a Basic Salary Increase
The central employees will hence experience a total salary raise of 25% to 30% as allowance, including DA, are computed as a proportion of basic salary. Level-1 employees have been asking for a revision of the figure used as a basis for computation of a number of employees’ basic wages from ₹10,000 to ₹26,000, thus effectively seeking a raise of ₹8,565 and above. On the other hand, employees at higher levels could expect to earn several lakhs more.
8th Pay Commission
Though many employees are eager at the idea of a possible increase in wages, the 8th Pay Commission was excluded from the Union Budget for this year. As of now, the scale of pay is the 7th Pay Commission implemented in 2014 to increase the GDP ratio of India. A tradition we have seen over the years is to come up with a new pay commission every decade, so the 8th Pay Commission should have been formed by the year 2026.