Government employee unions have proposed a major change in the salary revision system under the Pay Commission framework.
Instead of waiting 10 years for a new Pay Commission, employee representatives now want salary revisions every five years, arguing that inflation and rising living costs are making the current system outdated far too quickly.
The demand was raised during the consultation meetings held in Delhi between April 28 and April 30, where the commission held discussions with representatives from the National Council-Joint Consultative Machinery (NC-JCM) and several employee bodies on issues related to fitment factor, salary hikes, pension reforms, allowances and the old pension scheme.
As part of its continuing , India Today had earlier reported that reducing the gap between two Pay Commissions from 10 years to 5 years was among the key suggestions raised during the meetings.
Employee representatives clarified that the Pay Commission itself cannot directly change the duration of the salary revision cycle, but said they wanted the commission to place the recommendation before the government.
Shiva Gopal Mishra, Secretary (Staff Side), National Council-Joint Consultative Machinery (NC-JCM), told India Today that the
“The five-year demand for the wage of the government employees should be met. There are many reasons for this,” Mishra said.
According to him, several public sector undertakings and banking institutions already revise wages every five years.
“All the public undertakings of the government have been arranged for five years. There is a change in wages in all our banking organisations in just five years,” he said.
Mishra also pointed out that private-sector employees often see salary revisions much faster.
“In the private sector, there is a change in wages in just three years. But the government employees have to wait for ten years to increase their wages,” he told India Today.
Inflation, he said, is one of the biggest reasons behind the demand.
“If we take it for ten years, then in the ten-year wait, our entire price index will increase a lot. And because of inflation, our wages that are made ten years in advance, instead of being in the original form, they are reduced,” Mishra said.
He argued that a shorter cycle would help preserve the real value of salaries.
“If they do this in five years, then the reduction or depreciation will not happen. They will get the same benefit,” he added.
Mishra also said several sectors already link wage revisions with inflation-based adjustments.
“Wherever it is happening in five years, that wage is being added to inflation and the index, so that people can benefit from inflation,” he said.
Dr Manjeet Singh Patel, National President of the All India NPS Employees Federation and National Mission for Old Pension Scheme Bharat, also said the long gap between Pay Commissions slows salary growth significantly.
“For example, if an employee was appointed in January 2016 at the basic salary of Rs 18,000, then after 10 years, the salary becomes only around Rs 37,000. So being only doubled in 10 years is very slow compared to the private sector,” Patel told India Today.
Patel said employee representatives have requested the commission to consider a revision cycle similar to sectors like banking.
“We have requested the commission that the Pay Commission should be provided in at least five years, like other sectors,” he said.
He pointed out that banking employees already receive wage revisions every five years.
“For example, in the banking sector, the pay commission is received every five years. There are some other corporate sectors, where salaries and pensions are revised quickly,” Patel said.
According to him, more frequent revisions would help government salaries remain competitive.
“If the pay commission is provided within five years, then the salary of the government officials will be able to increase competitively,” he said.
One of the central arguments from employee unions is that dearness allowance (DA) revisions alone are not enough to fully offset rising living costs.
While DA is revised twice a year to account for inflation, unions argue that it does not adequately address structural increases in spending related to housing, healthcare, education and urban living.
Representatives say that by the time a new Pay Commission arrives, the real value of salaries has already been significantly eroded.
But experts say the issue is more complicated than simply increasing the frequency of salary revisions.
Rahul Ahluwalia, Founder Director of the Foundation for Economic Development (FED) and formerly with NITI Aayog, said government salaries and pensions already account for a very large share of public expenditure.
“For states, on average salaries and pensions make up more than 40% of their revenue receipts,” Ahluwalia told India Today. “For the Union government too, salaries and pensions together form a substantial part of expenditure.”
According to him, more frequent Pay Commissions could sharply increase pressure on government finances.
“What happens over time is that more and more government budgets get consumed by salaries and pensions, leaving less room for development and investment,” he said.
Ahluwalia said governments also need money for infrastructure, healthcare, welfare schemes, education and capital expenditure.
“If more and more of the budget goes towards salaries and pensions, then governments either have to cut spending elsewhere or increase taxes,” he said, adding that taxpayers ultimately bear the cost of salary revisions.
“There is no such thing as a free lunch,” he said. “When public employees get higher salaries, higher pensions and higher benefits, ultimately the taxpayer pays for it.”
Ahluwalia also said the debate around government salary revisions cannot be separated from the broader issue of job security and accountability.
According to him, many private-sector employees face performance pressure, job uncertainty and market-linked salaries, while government jobs continue to offer higher stability.
“The taxpayer also has to work hard every day. If private-sector workers do not deliver results, they can lose their jobs. So the debate should also include the issue of accountability,” he said.
He argued that discussions around higher salaries should also include conversations around public service delivery.
“The conversation cannot only be about increasing salaries. There also has to be discussion around accountability and public service delivery,” he said.
Ahluwalia also referred to research comparing public-sector compensation globally.
He cited work by economist Geeta Gandhi Kingdon, saying Indian government employees, especially teachers, are among the highest paid in the world relative to India’s GDP per capita.
“At some point, the question has to be asked — what are citizens getting in return for the taxes they are paying?” he said.
Ahluwalia said salary hikes are often politically easier to approve because governments do not want confrontation with large employee groups.
“It is always politically easier to agree to salary hikes because no government wants confrontation with employee groups,” he said.
He argued that while employees naturally seek better salaries to keep up with inflation, governments also need to think about long-term fiscal sustainability.
“Society as a whole bears the cost eventually,” he said.
Experts say a possible middle-ground solution could involve more frequent reviews of allowances, fitment formulas or inflation-linked corrections instead of setting up a full Pay Commission every five years.
Some economists have suggested a more dynamic salary revision mechanism where certain components automatically adjust periodically based on inflation and economic conditions.
For now, the demand for a five-year Pay Commission cycle has opened up a wider debate around inflation, salary competitiveness, taxpayer burden and the long-term cost of governance in India.