Outlook Business Desk
The Centre is finalising the 8th Central Pay Commission’s terms of reference. Employee representatives have submitted a fresh ''wish list'' outlining changes they expect in salaries and pensions.
Although the formation of Eighth Central Pay Commission was approved in January 2025, the government has yet to constitute the panel. Ministries and departments are still submitting their inputs to finalise its Terms of Reference.
The Centre has sought inputs from key departments, including the Ministry of Defence, Ministry of Home Affairs, Department of Personnel and Training (DoPT), and the Ministry of Finance. Views from various state governments are also being considered before formally setting up the Commission.
The Eighth Central Pay Commission will review salary and pension structures for approximately 4.5 million (45 lakh) central government employees and 6.8 million (68 lakh) pensioners. This includes military personnel covered under the defence pension category.
Staff representatives have urged the government to reinstate the Old Pension Scheme for employees who joined after 2004. They want the current National Pension System (NPS), a contributory scheme, to be replaced with the earlier guaranteed-benefit model.
A major staff-side demand is for universal cashless medical facilities for all serving employees and pensioners. They want access to treatment at empanelled hospitals across India, without upfront payment or reimbursement delays.
Staff representatives have also requested that the child education allowance and hostel subsidy be extended up to the postgraduate level. This would ease the financial burden on employees supporting children through higher education.
According to Kotak Institutional Equities report, central government salaries may increase by around 13% under the 8th Pay Commission. This estimate is based on a fitment factor of 1.8—lower than the 2.57 factor used during the 7th Pay Commission revision.
The 8th Central Pay Commission is yet to be formally constituted, as the government has not issued an official notification. Once notified, the panel will be appointed and begin its review of pay, pensions, and benefits for millions.