Since the formation of the Eighth Pay Commission, the biggest concern among central employees and pensioners was regarding ‘Pension Revision’. Amidst the letters written to the Prime Minister and the Finance Minister by the employee organizations and the objections raised, the Finance Ministry clarified the situation in the Rajya Sabha on Tuesday. The government told Parliament that the Eighth Pay Commission will also give its recommendations on pension revision. However, the government has not given any message to the employees hoping to merge Dearness Allowance (DA) with the basic pay.
Parliament members Javed Ali Khan and Ramji Lal Suman had asked the government through an unstarred question whether pension revision is not proposed under the 8th Pay Commission? Giving a written reply to this, Minister of State for Finance Pankaj Choudhary said, “The Eighth Central Pay Commission will give its recommendations on various issues like salary, allowances and pension etc. of central employees.” This statement of the Minister has put an end to all the speculations in which it was being said that the mention of pension is not clear in the ‘Terms of Reference’ (TOR) of the Commission.
Will DA be merged with basic salary?
Another important question asked in Parliament was whether the government will merge the existing Dearness Allowance (DA) or Dearness Relief (DR) with the basic salary to provide immediate relief to central employees and pensioners? On this, the Minister of State for Finance clarified that the government has no such plan at present. Pankaj Chaudhary said, “No proposal to merge the existing dearness allowance with the basic salary is currently under consideration with the government.”
Notification was issued on 3 November
Giving information about the progress of the Eighth Pay Commission, the Minister said that the government has notified the proposal along with the constitution of the Commission and the ‘Terms of Reference’ (ToR) for it on November 3, 2025. Along with this, the chairman and members of the commission were also appointed in the beginning of November.
What are terms of reference?
The ‘Terms of Reference’ is a kind of ‘rule book’ for the Pay Commission. The commission prepares its report within this framework. It includes definitions, rules and demands of employee organizations. The ToR is drafted by a Joint Consultative Committee, which consists of representatives from employee unions. After getting the approval of the Cabinet, the Pay Commission prepares its final report on the basis of these conditions. It has become clear from the government’s reply in Parliament on Tuesday that pensioners are not out of the purview of the 8th Pay Commission. This clarification is a major victory for the employee unions, who had been continuously demanding amendments to the ToR. However, the government’s refusal to accept DA merger indicates that major changes in the pay structure will be possible only after the commission’s final report.
