After the implementation of the 8th Pay Commission, the disposable income of about 50 lakh central government employees will increase, that is, they will have more money to spend. This will benefit the country’s automobile companies, such as Eicher Motors, TVS Motor and Maruti Suzuki. This is the statement of Goldman Sachs.
Employees will also get tax benefits (8th pay commission)
Goldman Sachs has said in a note that the 8th Pay Commission can increase the average monthly salary of up to Rs 1 lakh by Rs 14,000 to Rs 19,000. Not only this, apart from the salary hike of the Pay Commission, the monthly tax savings of the employees will also be Rs 7,500, which will be applicable from the financial year 2025-26. This reduction in income tax was announced in the 2026 budget.
According to Goldman Sachs, Eicher Motors, TVS Motor and Maruti Suzuki as well as automotive system supplier Uno Minda will benefit from salary hikes in the 8th Pay Commission. This is based on the salary hikes of the previous Pay Commission implemented in 2016 and the growth shown by these companies.
Performance of Pay Commission and Companies
Let us tell you that the 7th Pay Commission was implemented from January 2016, after which, in a period of three years, the four companies mentioned above have seen tremendous growth. Between FY 2016 and FY 2018, Eicher Motor’s revenue grew at a CAGR of 44%. Goldman Sachs data showed that Uno Minda recorded a CAGR of 27% in the same three-year period. Maruti Suzuki followed at 17% and TVS Motor at 15%.
In comparison, some other automobile companies like Mahindra & Mahindra Ltd grew at a CAGR of 9% in the same period, Hero MotoCorp grew at a CAGR of only 6%, Bajaj Auto at 5% and Tata Motors at 4%.
Haryana old age pension Rs 3500, big announcement by Haryana government
The formation of the 8th Pay Commission was approved by the Union Cabinet in January this year. The formal formation of the panel is expected in April 2025, Goldman Sachs said, citing media reports. The revised pay is expected to be implemented in calendar year 2026 or 2027.
Apart from the salary hike of 50 lakh central government employees, the introduction of the pay commission will also increase the pension of 65 lakh retirees. According to Goldman Sachs, the estimated allocation for the introduction of the pay commission could be around Rs 2 lakh crore, as has been quoted in several press reports. The 7th Pay Commission had cost the exchequer Rs 1.02 lakh crore in FY17.