Is it a Pay Commission or a Finance Commission? — Questions C. Srikumar on the Terms of Reference of 8th CPC

OPINION PIECE

The Ministry of Finance today issued the long-awaited notification on the formation and Terms of Reference (ToR) of the 8th Central Pay Commission (CPC). However, the new ToR has triggered sharp criticism among Central Government employees and pensioners, with unions calling it a “deviation” from past practice.

Unlike previous Pay Commissions, the ToR of the 8th CPC places major emphasis on national economy, fiscal prudence, and funds for development and welfare activities, instead of focusing primarily on employees’ pay structure and pension revision. Notably, the existing 69 lakh pensioners and family pensioners have been kept outside the purview of the 8th CPC — a move that has sparked widespread concern.

C. Srikumar, General Secretary of the All India Defence Employees Federation (AIDEF) and Member of the National Council (JCM), said “It is really shocking to note that a Pay Commission, which is expected to recommend revision of emoluments for Central Government employees and pensions for existing pensioners, has been assigned ToR focusing on national economy and fiscal prudence,” Srikumar said.

“This is more like a Finance Commission seeking to save government funds by reducing what is legitimately due to employees and pensioners,” he added.

Srikumar observed that unlike the 7th CPC, which was directed to take into account the expectations of employees, the current ToR makes no mention of employee welfare or wage aspirations, implying that the Commission may not consider their long-pending demands seriously.

He also criticized the rejection of the demand for inclusion of the Old Pension Scheme (OPS) within the ToR, calling it a “blatant disregard for old-age protection of government servants.”

“The Government expects 69 lakh pensioners and family pensioners to survive on pensions fixed in 2016, without any revision. It’s as if they are no longer deserving of financial justice,” he said.

In protest, AIDEF has submitted a representation to Finance Minister Nirmala Sitharaman, urging amendments to the ToR and inclusion of key employee and pensioner-related provisions. The main demands include:

• Consideration of employees’ expectations for a need-based, dignified wage revision, given the severe manpower shortages in most departments.

• Inclusion of the restoration of the Old Pension Scheme (OPS) in place of the contributory National Pension System (NPS).

• Revision of pensions for existing pensioners and family pensioners, restoration of commuted pension after 11 years, and introduction of enhanced pension by 5% every five years as suggested by the Parliamentary Standing Committee.

• Date of effect of the 8th CPC recommendations to be January 1, 2026.

Srikumar concluded by saying that time has come for employees and pensioners — both Central and State Government — to unite and protest against what he described as “an injustice in the name of fiscal discipline.”

“The ToR seems designed not to meet the expectations of employees and pensioners, but to save government money at their expense,” he asserted.

Views expressed here are those of C. Srikumar, General Secretary of the All India Defence Employees Federation (AIDEF) and Member of the National Council (JCM)