Enhanced Compensation Structure: Insights into ToR Proposal - Including a Minimum of Three Promotions, Periodic Pension Adjustments Every Five Years, Salary Scale Harmonization, and Further Developments
The Indian government has initiated the process of forming the 8th Central Pay Commission (CPC), with key stakeholders, including the Ministry of Defence, Ministry of Home Affairs, Department of Personnel & Training, and state governments, providing their inputs. However, as of mid-2025, the Terms of Reference (ToR) for the commission have yet to be finalized [2][3].
The Staff Side of the National Council-Joint Consultative Machinery (NC-JCM), a platform for dialogue between the government and its employees on matters of common interest and employee welfare, submitted their proposed ToR for the upcoming 8th CPC in February this year [4].
The NC-JCM has put forth a series of demands and recommendations for the commission. These include the implementation of Parliament Committee recommendations on Central Government Health Scheme (CGHS), enhancing Fixed Medical Allowance (FMA) and ensuring cashless, hassle-free medical care for employees and pensioners. The commission has also been urged to introduce new need-based advances and restore those discontinued previously [1].
The NC-JCM has proposed extending the Children Education Allowance and Hostel Subsidy up to the Post-Graduate level for employees' children, and suggesting a separate Risk Allowance, insurance coverage, and adequate compensation for employees working with hazardous materials like explosives and chemicals [1].
For the defence sector, the NC-JCM has recommended a comprehensive revised pay structure, effective from January 1, 2026, and addressing unresolved anomalies from the 7th Pay Commission raised in Anomaly and JCM meetings. A major demand is to scrap the contributory National Pension System (NPS) and reinstate the earlier defined benefit pension system under CCS (Pension) Rules 1972/2021 [1].
The NC-JCM has also suggested merging a suitable percentage of Dearness Allowance (DA) and Dearness Relief (DR) with the basic pay and pension, better pension terms, quicker restoration of commuted pension (after 12 years), and parity across past and future pensioners, with pension reviewed every five years [1].
In addition, the NC-JCM has called for fixing anomalies in the Modified Assured Career Progression (MACP) scheme, ensuring at least three promotions in a clearly defined hierarchy. They have also proposed that the 8th Pay Commission cover a wide range of employees, including Central Government (industrial and non-industrial), All India Services, Defence and Paramilitary Forces, Grameen Dak Sewaks, Union Territory staff, Audit and Supreme Court employees, Regulatory body staff (excluding RBI), and Autonomous Institutions [1].
The NC-JCM has also advocated for payment of Risk and Hardship Allowance to all Indian Railway employees who work under challenging conditions 24x7 [1].
Minister of State in the Ministry of Finance Pankaj Chaudhary has confirmed that the government has received suggestions from the Staff Side of NC-JCM as part of stakeholder consultation [4]. Despite the ongoing discussions and parliamentary scrutiny of the 8th CPC, the exact timeline for the finalization of the ToR remains unclear [2][3].
References: [1] https://www.thehindu.com/news/national/central-government-staff-side-suggestions-for-8th-pay-panel-to-r/article65061225.ece [2] https://www.financialexpress.com/economy/8th-pay-commission-discussions-and-parliamentary-scrutiny-ongoing-clarity-on-to-r-and-appointments-awaited/2313667/ [3] https://www.livemint.com/news/india/8th-pay-commission-government-awaits-finalisation-of-terms-of-reference-11626897773891.html [4] https://www.business-standard.com/article/economy-policy/government-receives-suggestions-from-staff-side-of-nc-jcm-for-framing-terms-of-reference-for-8th-central-pay-commission-123051700278_1.html
The Staff Side of the National Council-Joint Consultative Machinery (NC-JCM) has advocated for the introduction of new need-based advances and for the restoration of discontinued ones within the finance sector. In the defense market, the NC-JCM has proposed a comprehensive revised pay structure for defense sector employees, effective from January 1, 2026.
The proposed demands and recommendations by the NC-JCM for the 8th Central Pay Commission (CPC) include merging a suitable percentage of Dearness Allowance (DA) and Dearness Relief (DR) with the basic pay and pension, and extending the Children Education Allowance and Hostel Subsidy up to the Post-Graduate level for employees' children.
