Will Finance Minister Nirmala Sitharaman use the highly-anticipated Union Budget 2025 to announce the formation of the 8th Pay Commission? The centre constituted the panel to discuss and announce the pay, perks and other benefits of its employees more than ten years ago.

In the pre-budget meeting with the Finance Minister, the Confederation of Indian Industries (CII) suggested her to constitute the panel immediately as it is already overdue.

The CII has the basic premise of putting more money into the pockets of the middle class.

Why Does CII Bat For 8th Pay Commission?

It has been argued that the additional money would push consumption, further boosting the manufacturing and services sectors.

They may have a cascading effect on the related sectors. This will boost the Indian economy. The GDP growth rate may be slow, but the growth would be for a long time.

Nirmala Sitharama also met trade union leaders of all hues, who also advised her to constitute the pay panel.

Pawan Kumar, the Organising Secretary (Northern Zone) of Bharatiya Mazdoor Sangh emphasised in the meeting that the Union government should immediately announce the formation of the panel for revision of pay-structure of central government employees.

National Secretary Swadesh Dev Roy of CPIM-affliated trade union CITU demanded in the meeting that the 8th Pay Commission should not only be constituted, it should in fact start working in February.

The ball was set rolling when the Confederation of Central Government Employees & Workers requested Prime Minister Narendra Modi to constitute the new pay commission.

It will impact 50 lakh government employees and 67 lakh pensioners.

Will Nirmala Sitharaman Announce Constitution Of Pay Panel?

Every one who met Nirmala Sitharaman in the pre-budegt meetings came out with a demand to cut taxes and give more moolas.

It is not possible to appease all, it is more difficult at a time when the focus in on taming the fiscal dificit.

Experts believe, it will be difficult to accomodate all demands of all sections of the society because of financial constraints.

Observers believe the Finance Minister would limit the fiscal deficit to 4.5% of the GDP.

She has taken this decision at a time when she has announced to carry out reforms, cut expenses and and remove avoidable costs.

Will Finance Minister Carry Out Reforms?

Nirmala Sitharaman will present the second budget of Modi 3.0 at a time when most of the elections, including those of four state assemblies, are over.

There is no assembly election in the offing, except Delhi and the BJP has no big stakes as no one expects the saffron party to win the polls.

Analysts believe, this is the best time for taking bold steps and unpopular decisions. Nirmala Sitharaman may choose to push the bitter pill down the throat of the country and the middle class may ve at the receiving end.

However, as the 7th Pay Commission was formed in February, 2014, it is time for the government to take the plunge.

The only question is whether Nirmala Sitharaman announces the formation of such a panel along with other provisions of the Union Budget 2025.

It may be a trivial issue among the big and bold decisions the government may announce.

Will Niramla Sitharaman Offer Delhi Voters Sop?

The second important question is if the Finance Minister will annouce sops for Delhi to entice the voters before the Delhi Assembly Elections 2025.

While announcing the date for the Delhi Elections, Chief Election Commissioner Rajiv Kumar told journalists that the Union Budget would come on February 1 and Delhi would vote on February 5. So, he will issue a standing instruction to the Cabinet Secretary that there should be no announcement related to Delhi in the Union Budget 2025.

This will create a level playing field for all political parties so that the ruling party of the Union government does not gain an advantage.