8th Pay Commission: Govt receives wish list from staff representatives

Finalising panel's terms of reference for hikes, which may kick in from Jan

Six months after the government announced plans to set up the Eighth Central Pay Commission to review its employees’ emoluments, it has received suggestions from staff representatives for the panel’s consideration. 

These suggestions include reinstating the Old Pension Scheme for government employees who joined service after 2004 and improving other retirement benefits, devising methods to ensure cashless medical benefits to employees and pensioners, and providing a child education allowance as well as a hostel subsidy till the post-graduation level. 

The panel’s recommendations would impact around 4.5 million government employees and 6.8 million pensioners, including defence personnel. 

While the government is yet to notify the Commission, whose recommendations are to take effect from January 1, 2026, it has set the ball rolling to finalise the panel’s terms of reference by seeking inputs from major stakeholders, including the States, and the Union Ministries of Defence, Home Affairs, and Personnel. 

Staff representatives’ pitches for the terms of reference are already in, Minister of State for Finance Pankaj Chaudhary said in response to a question in the Rajya Sabha on Tuesday. The minister also shared a copy of the suggestions received from the National Council of Joint Consultative Machinery (NC-JCM), chaired by Cabinet Secretary T V Somanathan. 

Among other things, the staff side has recommended a hike in what is known as the ‘standard consumption norm’ from 3 to 3.6 family consumption units while framing the terms of reference (ToR) of the 8th Central Pay Commission (CPC). A consumption unit is a standardised measure used to compare the nutritional needs of individuals typically based on a reference adult male doing moderate work. 

If the proposed hike is included in the ToR of the 8th CPC, this could increase the base expenditure estimate significantly, and push up the starting salary benchmark in the government. The NC-JCM has emphasised that this recommendation is based on the findings of an expert committee under the Ministry of Labour and Employment to determine the National Minimum Wage Policy. 

The adoption of the 7th Central Pay Commission, constituted in 2014 and effective from January 1, 2016, had entailed an expenditure hike of ₹1 trillion in 2016-17 for the Centre. The pay commissions are set up every decade to evaluate and suggest modifications to pay scales, allowances, and benefits for central government employees taking into account inflation and other economic factors. 

While the government has recently offered employees who joined service after 2004 the option to switch to a newly formulated Unified Pension Scheme (UPS), staff representatives have pushed for a reinstatement of the non-contributory defined benefit old pension scheme (OPS) for post-2004 recruits. Moreover, they have sought an enhancement in pension payments after every five years, and asked for parity between past and future pensioners. 

Apart from this, the staff side has also mooted that the new pay panel consider hiking other old-age benefits such as Death cum retirement Gratuity, Family pension, and restoration of commuted portion of pension after 12 years. On health care, they have sought methods for cashless and hassle-free medical facilities to employees and pensioners, including postal pensioners.

 

The 8th CPC should consider the merger of non-viable pay scales and review the anomalies in the Modified Assured Career Progression (MACP) scheme, the NC-JCM recommended. The MACP provides better financial terms for employees who have not received regular promotions for an extended period. 

 

Compared to the 7th CPC, the NC-JCM has sought the inclusion of more categories of employees to be granted the revised benefits, such as Grameen Dak Sewaks belonging to the Postal Department, para military forces and employees of central government autonomous bodies and institutions. 

 

The NC-JCM is a platform for constructive dialogue between the representatives of the staff side and the official side for peaceful resolution of all disputes between the central government as employer and the employees.

 

While the government considers the recommendations by the NC-JCM while formulating the ToR, they are not binding in nature. Its recommendations are reviewed by the Department of Personnel & Training (DoPT) and Department of Expenditure, and a final draft is prepared for Cabinet approval.

 

The staff side has also urged the next pay commission to consider a Risk and Hardship Allowance for all Indian Railways employees, and a Special Risk Allowance along with insurance coverage for Defence Civilian employees involved in manufacturing arms, ammunitions, chemicals, explosives and acids etc., and their storage, citing the perennial risky and hazardous working conditions under which workers operate. 

Pressing for wider benefits

 

*  Devising methods to provide cashless medical benefits to employees and pensioners

  *  Re-examining and reinstating old pension scheme for post-2004 recruits

  *  Children education allowance and hostel subsidy up to post-graduation level

  *  This is likely to benefit 4.5 million central government employees and 6.8 million pensioners