Madhya Pradesh Plans Budget for 8th Pay Commission Hike

The government of Madhya Pradesh is preparing to implement a budget that aligns salaries and pensions with the recommendations of the 8th Pay Commission. This plan will affect approximately 7.5 lakh regular government employees and 4.5 lakh pensioners. A salary and pension increase of around 15 percent is anticipated, marking a significant adjustment for state employees.

Under the leadership of Chief Minister Mohan Yadav, the Madhya Pradesh administration is working on budget projections for the upcoming fiscal years. A dedicated committee has been established to oversee this process. Currently, government employees and pensioners in Madhya Pradesh receive compensation based on the 7th Pay Commission, which is set to conclude in December 2025.

As the Modi government has already appointed a chairman for the 8th Pay Commission, there is an expectation that the Commission will submit its report to the central government prior to the expiration of the current commission. Once this report is approved, Madhya Pradesh is poised to implement the newly recommended salary structures.

The financial implications of this transition are significant. Presently, approximately 33 percent of the state’s annual budget is allocated to establishment costs. Should the 8th Pay Commission recommend an increase in salaries based on a multiplier of 3 to 3.25 percent, the establishment expenditure could rise to between 37 and 40 percent of the total budget.

To prepare for this potential shift, the Finance Department has instructed all state departments to formulate proposals for establishment expenditures, assuming an annual salary increase of 3 percent. Historically, under the 7th Pay Commission, a multiplication factor of 2.75 was utilized, which resulted in monthly salary increments ranging from Rs 7,000 to Rs 18,000.

The conversation around the 8th Pay Commission is not only about salary increases but also about how the state will manage these changes within its budgetary framework. As the government prepares for future financial planning, the impact on public sector employees and the overall economy remains a topic of keen interest.