The long-awaited 8th Central Pay Commission (CPC) is inching closer to reality, with government employee unions indicating that the Terms of Reference (ToR) for the panel may soon be finalized. This development has sparked fresh discussions around fitment factor revision, minimum wage, and pension enhancements.
Government Likely to Approve Terms of Reference Soon
According to Shiv Gopal Mishra, secretary of the staff side of the National Council-Joint Consultative Machinery (NC-JCM), the central government is expected to give its nod to the Terms of Reference shortly. “We expect the approval soon. Once the ToR is finalized, formal discussions on demands like minimum wage and fitment factor can begin,” Mishra said.
Another senior NC-JCM member, on condition of anonymity, also confirmed that the proposal is moving ahead at a steady pace.
The ToR serves as the guiding document for the Pay Commission, outlining the key issues and recommendations to be studied.
Key Employee Demands Likely to Shape 8th Pay Commission Agenda
The employee side of the NC-JCM has already submitted its draft ToR to the Centre, outlining several critical demands. Some of the most notable ones include:
1. Revised Minimum Salary Based on “Five Consumption Units”
- The NC-JCM wants the minimum salary to be calculated based on the needs of five consumption units, rather than three, as was done in the 7th Pay Commission.
- This change accounts for aged parents, who are now a legal responsibility under the Maintenance and Welfare of Parents and Senior Citizens Act, 2022.
2. Increase in Fitment Factor
- A higher fitment factor is being demanded to ensure a meaningful hike in pay.
- The employee forum expects discussions around whether the new fitment factor should be 1.92, 2.0, or even 2.57, once the ToR is finalized.
3. Merger of Pay Scales
- The union is pushing for the merger of unviable pay scales to address pay stagnation and improve promotion opportunities.
- Suggested mergers include:
- Level 1 with Level 2
- Level 3 with Level 4
- Level 5 with Level 6
4. DA Merger with Basic Pay
- Employees demand the merger of 50% Dearness Allowance (DA) with Basic Pay, a practice followed during the 5th Pay Commission but discontinued later.
- With the current DA at 55%, this demand has gained urgency.
5. Pension Reforms
- Restoration of commuted portion of the pension after 12 years.
- Periodic enhancement of pension every 5 years, as suggested by the Parliamentary Standing Committee.
Summary of Key Demands from NC-JCM
| Area | Proposed Change |
|---|---|
| Minimum Salary | Based on 5 consumption units |
| Fitment Factor | To be revised to 1.92, 2.0, or 2.57 |
| Pay Scale Merger | Levels 1–6 to be merged in pairs |
| Dearness Allowance | Merge 50% DA with basic salary |
| Pension Enhancements | Restore commuted portion after 12 years |
| Periodic Pension Review | Increase pension every 5 years |
What Happens Next?
While the Union Cabinet approved the formation of the 8th Pay Commission in January 2025, the formal setup of the panel is still pending. Once the ToR is approved, the panel is expected to begin its work on assessing current salary structures, inflation impacts, and making long-term recommendations for central government employees and pensioners.
Traditionally, pay commissions are set up once every 10 years, with the last (7th CPC) being implemented in 2016.
FAQs on 8th Pay Commission
1. When will the 8th Pay Commission be implemented?
As of now, there’s no official timeline, but it is expected to be in place by mid-2026, following the completion of recommendations.
2. Will the fitment factor increase in the 8th Pay Commission?
Yes, a revision is expected. Discussions will begin once the ToR is approved, with proposals ranging from 1.92 to 2.57.
3. Is the merger of DA with basic pay confirmed?
Not yet. However, this is one of the top demands by employee forums and is under serious consideration.
4. Will there be changes in pension rules?
The NC-JCM is advocating for restoration of the commuted pension after 12 years and a 5-year pension hike policy.
5. Who benefits from the 8th Pay Commission?
All central government employees and pensioners will benefit from revised pay, allowances, and retirement benefits.
