8th Pay Commission update: In a fresh development, the Finance Ministry has clarified certain concerns flagged by various labour unions and employee representative bodies regarding the 8th Pay Commission Terms of Reference (ToR).
Ever since the government notified the ToR, a small but crucial omission about the absence of the ‘pension revision’ term had set off big concerns. Unions said there was no explicit mention of pension revision in the notified ToR.
They argued that this was not a routine drafting issue but a worrying deviation from past practice. Previous Pay Commissions always stated clearly that they would revise both pay and pension. This time, the silence created fears that the government was trying to keep pension revision out of the 8th CPC’s mandate.
Now, the government has finally responded — and the clarification is expected to bring some relief.
Pension revision is part of the 8th CPC, says Finance Ministry
Responding to an Unstarred Question in the Rajya Sabha, the Ministry of Finance made the position unambiguous.
Minister of State for Finance Pankaj Chaudhary stated, “The Eighth CPC will make its recommendations on the various issues viz. Pay, Allowances, Pension, etc. of the central government employees.”
With this, the government has officially confirmed that pension revision will happen under the 8th Pay Commission, just like earlier commissions.
This clarification directly addresses one of the biggest anxieties staff associations had expressed since November.
Why the confusion began among employees
The government had notified the 8th CPC and its Terms of Reference on 3 November 2025. While the announcement was welcomed initially, the detailed ToR raised eyebrows because:
It did not explicitly mention pension revision.
It included references to the “unfunded cost of non-contributory pension schemes”, which pensioner groups saw as a signal that finances might be prioritised over social security.
Because more than 69 lakh pensioners rely on periodic revisions to maintain parity with serving staff, this uncertainty quickly snowballed into a major concern. Unions wrote to the government, warning that excluding pension revision would be a “historic departure” and would harm millions of retirees.
Finance Ministry’s reply shuts down that fear
No relief on DA–DR merger for now
The Rajya Sabha question also asked whether the government would merge Dearness Allowance (DA) and Dearness Relief (DR) with basic pay immediately — a long-pending demand, especially after DA breached the 50% mark.
But the Finance Ministry has made it clear that: “No proposal regarding merger of the existing Dearness Allowance with the Basic Pay is under consideration at present.”
This means employees and pensioners will have to wait, most likely until the 8th CPC submits its report (expected in 2027), before any such decision is reconsidered.
What worried pensioners the most
The apprehension wasn’t misplaced. Pension revision has always been an integral part of CPCs because it prevents disparities between older and newer retirees. Without this periodic adjustment, older pensioners fall behind in income, gaps widen between different batches of retirees, and the principle of parity — a key feature of India’s pension system — weakens.
Unions feared that if the 8th CPC ignored pensions, it would permanently change how retiree welfare is handled. Tuesday’s clarification restores confidence that the traditional framework remains intact.
What happens next
With the Finance Ministry’s assurance, one major cloud over the 8th CPC has cleared. However, the DA–DR merger issue remains unresolved.
Employee groups are still pushing for clarity on other matters such as NPS/UPS, compassionate appointments, trade union rights, and whether DA arrears will ever be considered.
For now, the biggest takeaway is this – the government has officially confirmed that the 8th Pay Commission will examine and recommend pension revision.
For nearly 70 lakh pensioners and 50 lakh serving central government employees, this is a significant reassurance — and a much-needed one after weeks of doubt.