8th Pay Commission: What Is Pay Scale Merger, Why Do Employee Unions Want It?

8th Pay Commission: The 8th Pay Commission has moved into one of its most important phases. After inviting suggestions from employees, pensioners and stakeholders across the country, the panel is now holding consultations that could shape the future salaries, pensions and allowances of nearly one crore beneficiaries.

The commission is expected to recommend changes that will affect around 50 lakh central government employees and nearly 65 lakh pensioners, including retired defence personnel. While the final report is still some time away, employee unions have already placed several key demands before the panel. Among the biggest is a complete overhaul of the existing pay matrix.

The 8th Central Pay Commission, headed by former Supreme Court Justice Ranjana Prakash Desai, was constituted on November 3, 2025. Former IAS officer Pankaj Jain serves as its Member-Secretary, while Professor Pulak Ghosh, a member of the Prime Minister's Economic Advisory Council, is also part of the commission.

Why Pay Scale Merger Has Become A Key Demand

Perhaps the most significant proposal is the merger of several existing pay levels.

The employee body has suggested combining Levels 2 and 3, Levels 4 and 5, Levels 7 and 8, and Levels 9 and 10 into unified pay scales. It argues that employees in these grades often perform similar duties and receive comparable salaries, yet remain separated by different pay levels. Over time, these differences create dissatisfaction and affect employee morale.

The union has also proposed a one-time upgrade for existing Level 5 employees by merging them with Level 6. It says thousands of Group C employees in departments such as the Central Secretariat, Defence, Railways and Postal Services have remained at Level 5 for years, limiting their career growth.

Employee Unions Seek Sweeping Reforms

One of the strongest submissions has come from the National Council-Joint Consultative Machinery (NC-JCM), one of the largest employee representative bodies.

The organisation has asked the commission to raise the minimum basic pay to Rs 69,000. It has also sought a simplified pay structure, housing and utility-linked salary components, pension reforms and an annual increment of 6 per cent, instead of the current 3 per cent. The union has argued that wages should be linked more closely with inflation to better protect employees' purchasing power.

According to reports, the NC-JCM has also urged the government to simplify promotion policies to improve career progression and reduce stagnation among employees.

More Demands Before The Commission

Apart from salary revisions, employee organisations have reportedly asked the commission to recommend improvements in several service-related benefits. These include easier provident fund withdrawals, faster settlement of medical reimbursement claims, better life insurance coverage for employees and pensioners, and simpler procedures for income tax-related documentation. These issues have also featured prominently during stakeholder consultations.

Consultations Underway Across The Country

The commission closed the first round of public suggestions on June 15. It will continue accepting data from ministries and departments until July 31. Since March, members of the panel have been visiting states and meeting employee associations, pensioners' groups and other stakeholders.

These discussions are expected to play a major role in deciding the future salary structure, pension formula and allowances for central government employees. Representatives from major departments, including Railways and Defence, have participated in the consultations.

When Will Employees Get The Final Recommendations?

The commission is expected to submit its report around 18 months after its constitution. If the schedule remains on track, the recommendations could be ready between February and April 2027.

However, history suggests that implementation usually takes longer. Previous pay commissions have required another two to three years before the revised salary structure was fully rolled out. That means even if recommendations are submitted in 2027, employees may have to wait until 2029 or even 2030 for complete implementation.

For now, the commission remains in the consultation stage. The recommendations it finally makes will determine the future pay, pension and allowances of nearly one crore serving and retired central government personnel for the next decade.

Source: NDTV Trending