Budget 2025 Expectations: 8th Pay Commission; Income Tax Relief, 100% Tax Exemption... - Govt Employees' Key Demands

Budget 2025: Central government employees are hoping for a faster implementation of the 8th Central Pay Commission. The discussions about the 8th Pay Commission began in early 2024 and are currently underway. Representatives of central government employees unions recently met Union Finance Minister Nirmala Sitharaman during a pre-Budget consultation and sought a faster implementation of the commission in order to make it effective on January 1, 2026. 

The unions also sought several tax and pension-related exemptions and urged that the old pension scheme be reinstated.

Eighth Pay Commission: 'Faster Implementation Please' - Unions Urge

Pawan Kumar, Zonal Secretary of Bharatiya Mazdoor Sangh urged the Finance Minister to speed up formalities to implement the 8th Pay Commission which is likely to be implemented by January 1, 2026, to ensure timely benefits for employees.

Sadhu Singh, Secretary General of the Government Employees National Federation, said that workers may lose hope if the central pay commission is not implemented in a timely manner. While government employees are still hopeful that the government may make some announcement on the 8th Central Pay Commission in Union Budget 2025, the government has clarified that there are no plans to implement the central pay commission.

8th Central Pay Commission - What Govt Said

“No such proposal is under consideration by the government for the constitution of Eighth Central Pay Commission for the Central Government employees, at present (sic),” the Ministry of Finance said in a reply in the Rajya Sabha on December 14.

All workers should be familiar with the Seventh Pay Commission's details. The Seventh Pay Commission was established on February 28, 2014, and its report was given to the government on November 19, 2015. It was launched on January 1, 2016. The Seventh Pay Commission has led to a rise in employee pay from Rs 7,000 to Rs 18,000. Following the Seventh Pay Commission, the attention has switched to the Eighth Pay Commission. 

8th Central Pay Commission: Post Implementation

The introduction of the 8th Pay Commission will increase employee wages. According to media sources, the minimum basic pay may increase from Rs 18,000 to Rs 34,560. Pensioners may see a hike of Rs 17,200. However, no formal information has been issued on this.

Over one crore employees in the country would get compensation raises after the Eighth Pay Commission is implemented. This will result in a financial burden for the government. As a result, the government will make an informed judgment about the 8th Pay Commission and disseminate the necessary information.
 

Budget 2025: Other Demands Of Unions

Among others, Kumar said that the government employees have sought additional incentives from the government. These include - 

• Income tax relief of up to Rs 10 lakh for government employees.
• 100% tax exemption for pensioners
• Separate budget allocation for MGNREGA schemes and increase it to 200 days from 100 days

Singh said that the Unified Pension Scheme (UPS) had affected the social security of long-serving employees as the family pension of 10 per cent is not clarified under the UPS. He advocated for reinstating the old pension scheme.