As the 8th Central Pay Commission (CPC) holds consultations with unions and stakeholders, three major employee bodies have put forward key demands for changes in the pay matrix and salary structure of central government employees and pensioners.

Following the 8th CPC's invitation for memorandums from eligible stakeholders last month, major employee bodies such as the NC-JCM, Maharashtra Old Pension Organisation and AIDEF submitted detailed recommendations.

Notably, these organisations collectively represent a large number of central government employees, pensioners and defence civilians. Their proposals are likely to significantly influence the panel's recommendations, which are expected by mid-2027.

What central govt employees are demanding?

Overall, the three major employee bodies have sought a comprehensive revamp of salaries, simpler pay structures, improved promotion systems and better pension and allowance benefits for central government employees and pensioners.

1. All three organisations have sought an increase in the minimum basic pay for central government employees -- Rs 69,000 by NC-JCM, Rs 65,000 by the Maharashtra Old Pension Organisation and Rs 69,000 by AIDEF.
2. On pay structure reforms, the NC-JCM has proposed a unified pay matrix up to Level 13, the Maharashtra Old Pension Organisation has sought rationalisation of pay levels, while AIDEF has recommended cadre restructuring and skill-based pay.
3. For structural reforms, the NC-JCM has proposed a simplified salary architecture, the Maharashtra Old Pension Organisation has called for a revised allowance framework, while AIDEF has recommended an overhaul of technical cadres.

Other major demands

1. On allowances, the NC-JCM has sought housing and utility-linked structured pay, the Maharashtra Old Pension Organisation has demanded higher HRA and a 2.5-times hike in travel allowance, while AIDEF has proposed a risk allowance of Rs 10,000-15,000.
2. On annual increments, the NC-JCM has proposed raising the rate to 6 per cent from 3 per cent, the Maharashtra Old Pension Organisation has sought a 5 per cent increment, while AIDEF has recommended progression-linked increments.
3. On dearness allowance (DA) and inflation management, the NC-JCM has proposed an inflation-linked wage model, the Maharashtra Old Pension Organisation has sought a minimum 4 per cent DA hike along with DA merger at 50 per cent, while AIDEF has demanded inflation-adjusted compensation.
4. On pension, the NC-JCM has sought structural alignment with revised pay scales, the Maharashtra Old Pension Organisation has demanded restoration of OPS along with UPS reforms and DA linkage, while AIDEF has called for pension parity with the revised pay structure.

How will the 8th CPC finalise decision?

Notably, inputs shared during these consultations are expected to play a key role in shaping future reforms related to salaries and pension structures for central government employees. The panel is likely to gather and analyse data before finalising recommendations on allowances, pension formulas and pay structures for employees and retirees.

Who is in the panel of 8th Pay Commission?

Former Judge of the Supreme Court of India Justice Ranjana Prakash Desai has been appointed as the Chairperson of 8th CPC. Meanwhile, Pulak Ghosh, Professor, IIM Bangalore has been appointed Part-Time Member of the new Pay Commission. The Government has appointed Pankaj Jain, Secretary, Petroleum & Natural Gas Ministry as the Member-Secretary of the Pay Commission.

Timeline of 8th CPC

In January 2025, the Central Government had announced formation of the 8th Central Pay Commission (8th CPC) to examine and recommend changes in Salaries and other benefits of Central Government employees.

The 7th Pay Commission's recommendations were approved within 6 months, which came in effect from January 1, 2016. If we consider the same timeline, the 8th Pay Commission likely to be implemented around 15-18 months from now.

Current salary for Central Government employees

Currently, Central Government employees and pensioners are paid under the 7th Pay Commission. As of now, the minimum basic pay for central government employees is Rs 18,000, while pensioners receive a minimum basic pension of Rs 9,000. Meanwhile, the maximum basic salary under 7th Pay Commission is Rs 2,25,000, while apex positions like the Cabinet Secretary and others receive Rs 2,50,000 per month. Under 7 CPC, fitment was set at 2.57. Moreover, the DA/DR currently stands at 60 per cent.