8th Pay Commission: Govt defers decision on key pay fixation issue after MACP – check details

The issue relates to employees who have already received financial upgradation under the Modified Assured Career Progression (MACP) Scheme and are later promoted through the regular promotion process. Employee unions have been demanding that such employees should also get a fresh pay fixation benefit on promotion. However, the government has now said that any major policy change on this issue will be examined by the 8th Central Pay Commission.

The decision was recorded during the 49th meeting of the National Council (Joint Consultative Machinery or JCM), chaired by the Cabinet Secretary. The minutes of the meeting were circulated by the Department of Personnel and Training (DoPT) through Office Memorandum No. 3/1/2025-JCA dated June 3, 2026.

Latest 8th Pay Commission developments

The Centre had announced the setting up of the 8th Central Pay Commission earlier this year to revise the salary, allowances and pension structure of nearly 50 lakh central government employees and around 65 lakh pensioners.

The Commission is currently in the initial stages of consultations and data collection from ministries and departments. While the final recommendations are expected to take time, employee organisations have already begun preparing their demands. The latest JCM decision makes it clear that the issue of pay fixation after MACP will be one of the important policy matters before the Commission.

What is the dispute?

The controversy revolves around Fundamental Rule (FR) 22(1)(a)(1), which governs pay fixation when an employee is promoted to a post carrying higher duties and responsibilities.

Normally, when an employee is promoted, this rule provides an additional financial benefit in the form of a pay fixation advantage.

However, the situation changes if the employee has already received a financial upgradation under the MACP Scheme.

Under the existing rules, an employee who has already moved to a higher pay level through MACP is generally not given another pay fixation benefit when he or she is later promoted to a post carrying the same pay level.

Employee unions argue that this defeats the very purpose of promotion. According to them, MACP is meant only to address career stagnation, whereas a regular promotion comes with greater responsibilities and a higher role within the organisation. Denying any financial benefit at the time of promotion, they say, discourages employees from accepting higher posts.

Why did the problem become bigger after the 7th Pay Commission?

Employee representatives told the National Council that the issue became much more serious after the implementation of the 7th Pay Commission.

Under the 6th Pay Commission, employees who had already received MACP benefits still got some financial advantage during regular promotion because of the difference in Grade Pay.

However, the 7th Pay Commission replaced the Grade Pay system with the Pay Matrix. As a result, that additional financial benefit disappeared in many cases.

According to employee unions, several employees today receive a regular promotion after MACP but see no increase in their salary because both positions fall within the same Pay Matrix level. They have therefore demanded an additional increment on promotion to restore the financial incentive.

What has the government decided?

The government has adopted a two-pronged approach.

First, the Chairperson indicated that the Department of Personnel and Training (DoPT) can examine specific cases where employees have faced exceptional hardship or technical anomalies under the existing rules.

However, the larger demand—to automatically grant an additional increment to every employee promoted after receiving MACP—has been treated as a major policy issue.

The National Council concluded that such a structural change cannot be decided through the JCM mechanism and should instead be examined by the 8th Central Pay Commission.

What does this mean for Central government employees?

For now, the existing rules remain unchanged.

This means employees who have already received financial upgradation under the MACP Scheme will generally continue to be ineligible for another pay fixation benefit when promoted to a post carrying the same Pay Matrix level.

At the same time, the JCM decision gives employee unions an official basis to raise this issue before the 8th Pay Commission during its deliberations.

If the Commission recommends changes and the government accepts them, future employees promoted after MACP could receive an additional financial benefit. However, any such relief will depend on the recommendations of the 8th Pay Commission and the Centre’s final decision.

The issue is expected to be one of the important agenda items as the Commission begins examining demands related to salaries, career progression and service conditions of Central government employees.

Disclaimer: This article is based on the minutes of the 49th meeting of the National Council (JCM) circulated by the Department of Personnel and Training (DoPT) through Office Memorandum dated June 3, 2026. The decision relates to discussions on a long-pending policy issue. Any change in pay fixation rules will depend on the recommendations of the 8th Central Pay Commission and the Central government’s final approval.

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