8th Pay Commission terms of reference likely by April

The terms of reference for the 8th Pay Commission are still to be firmed up and could take a couple of months to finalise them, Expenditure Secretary Manoj Govil has said.

Speaking to Business Today, Govil said the consultations with state governments and major ministries, including the Ministry of Defence, Ministry of Home Affairs, and the Department of Personnel and Training have started.

“We hope to finalise the terms in the next couple of months,” he said.

Govil indicated that while the commission’s recommendations would impact future budgets, they would not influence the upcoming financial year, as the final report may take a year or more to materialise.

“Even if it takes one year from, let us say, April 2025 to April 2026, so the recommendations would not come by the time that we start formulating for the next budget,” Govil said. “So, while the impact will be there on the next budget, but in some sense, we don't know the true impact unless we have got the recommendation.”

The Union government held a key meeting with representatives of central government employees on Monday to discuss the Terms of Reference (ToR) for the 8th Pay Commission, a move expected to benefit over 49 lakh employees and nearly 65 lakh pensioners.

The meeting was chaired by the Secretary of the Department of Personnel and Training (DoPT) and was attended by members of the Staff Side of the Standing Committee of the National Council (JCM). The discussions centred on employee demands, including salary revisions, pension enhancements, and risk allowances for defence and railway personnel.

Key issues discussed

According to a letter from Shiva Gopal Mishra, Secretary (Staff Side), National Council (JCM), several key demands were put forth by employee representatives during the meeting:

Pension and retirement benefits: Employee unions insisted on restoring the commuted portion of pensions after 12 years instead of the existing 15 years. They also pushed for implementing Parliamentary Standing Committee recommendations on pension enhancement every five years.

Restoration of old pension scheme: The staff side strongly advocated for reverting to the non-contributory pension scheme under the Central Civil Services (Pension) Rules, 1972, for employees recruited after January 1, 2004.

Determination of minimum wage: The delegation argued for a revised approach to calculating minimum wages, advocating for a family unit of five members instead of three, in line with The Maintenance and Welfare of Parents and Senior Citizen Act, 2022.

Children education allowance and hostel subsidy: A proposal was made to extend these benefits up to the postgraduate level to support employees' children in higher education.

Interim relief and dearness allowance merger: The staff side urged for an immediate grant of interim relief and merger of 50% of Dearness Allowance (DA) with basic pay, similar to previous Pay Commissions.

Inclusion of more employee categories: They pressed for including Gramin Dak Sevaks (postal employees) and Election Commission employees within the scope of the 8th Pay Commission.

Government's response

Mishra said that the DoPT secretary acknowledged the concerns raised and stated that the discussion had helped provide more clarity on the issues to be considered. She assured the representatives that further consultations would be held before finalising the ToR.

The employees’ representatives also requested that pending issues agreed upon in previous Joint Consultative Machinery (JCM) meetings should not be deferred to the Pay Commission, as this would further delay implementation.

Next steps

The Staff Side of the JCM is now preparing a detailed memorandum justifying each demand. A separate circular has been issued to all affiliated organisations to provide inputs before finalising submissions to the 8th Pay Commission.

The 8th Pay Commission, once formally constituted, will determine revised pay structures, benefits, allowances, and pension schemes for central government employees. The process, which involves consultations with state governments and key ministries, is expected to shape salary structures for millions of government employees across the country.