In a move aimed at boosting morale and countering rising living costs, the Modi government is reportedly considering a 5% additional salary hike for millions of central government employees, along with a special bonus package. This initiative comes as part of broader efforts to provide financial relief amid inflation and to enhance employee welfare.
Will There Be a 5% Salary Hike?
Sources indicate that the Finance Ministry is actively considering a proposal to increase the basic salary of central government employees by 5%. If approved, this hike would impact around 47 lakh employees and is expected to be implemented in the next financial quarter.
This salary hike could be part of an ongoing revision under the 7th Pay Commission framework or might serve as a precursor to the eventual introduction of the 8th Pay Commission in 2022.
Special Bonus to Coincide with Major Festivals
In addition to the salary hike, there is also news of a special bonus that could be paid to government employees around the festival season, particularly during Diwali and Dussehra. The bonus is expected to be a one-time payment, specifically targeting employees in Group B and Group C categories.
If approved, this special bonus is expected to be credited by September 2025, bringing additional financial support to employees during the festival period.
Impact on Pensioners
While the primary beneficiaries of the salary hike are working central government employees, pensioners are also likely to see benefits. Similar adjustments may be made to the Dearness Relief (DR) for pensioners, which is generally aligned with the salary structure of working employees. This ensures that retired personnel are not left out of the financial benefits tied to these increases.
Government’s Justification for the Hike
The government is said to be justifying the increment as a response to the rising inflation and a strategy to stimulate domestic consumption. According to one senior official, the objective is to “balance employee welfare with economic stability,” with the ultimate goal of boosting economic activity.
What’s the Timeline for the Final Decision?
While the discussions have reached an advanced stage, no official notification has been issued yet. The final announcement is expected to take place sometime during the first or second week of May 2025. Employee unions have welcomed the potential improvements, although they continue to push for other demands such as the revision of the fitment factor and clearance of DA arrears.
FAQs
When will the 5% salary hike be implemented?
The salary hike is expected to be implemented in the next financial quarter, pending approval.
Will pensioners benefit from this proposal?
Yes, pensioners are expected to receive a corresponding increase in their Dearness Relief (DR).
Is the bonus payment linked to specific festivals?
Yes, the special bonus is likely to be paid in line with major festivals like Diwali and Dussehra.
What are the employee unions saying about this?
Employee unions are generally supportive of the proposed changes but continue to demand revisions in fitment factors and pending DA arrears.
When will the final decision be announced?
The government is expected to make an official announcement in the first or second week of May 2025.