People of every section have expectations from this budget. Especially the central employees are keeping an eye on the speech of the Finance Minister. Actually, the budget is going to be presented about three months after the formal formation of the Eighth Pay Commission.
18 month deadline
Actually, the Pay Commission has been given a time limit of 18 months to submit its report. Speculations on speedy implementation of the Eighth Pay Commission recommendations will be rife if the central government decides to allocate a sum to bear the financial impact of the revised pay and pensions. Let us tell you that the total number of central government employees and pensioners is more than 1.1 crore. These people are waiting for the implementation of the recommendations of the Eighth Pay Commission. If there are some positive signals in the budget, the Pay Commission may submit its report much before the deadline in May 2027.
impact on treasury
The implementation of the 7th Pay Commission had an impact of approximately Rs 1.02 lakh crore on the exchequer in 2017. At that time, the basic pay and pension were revised using a fitment factor of 2.57 (157%). It will be important to see what is the formula for fitment in the case of 8th Pay Commission. Even if the fitment factor is less, the impact on the exchequer under the 8th Pay Commission will be greater. Last year, Kotak Institutional Equities estimated a potential fitment factor of 1.8 and said the fiscal impact of the entire process could be between Rs 2.4-3.2 lakh crore.
