The Central Pay Commission (Part- IV)
By Lokanath Mishra, the Chief Adviser, the all India pensioners association of CBIC and the all India CGHS beneficiaries association of CBIC:
Most Pressing Anomalies the 8th Pay Commission Must Address
Despite seven successive Pay Commissions, several long-standing anomalies continue to distort the pay and pension structure of Central Government employees and pensioners. These disparities—rooted in inconsistent implementation, selective interpretation, and structural bias—have eroded the principle of “equal pay for equal work” and generated extensive litigation.
The 8th Central Pay Commission (CPC) must address these issues comprehensively, through statutory correction, independent oversight, and uniform implementation.
- Grade Pay and Pay-Scale Disparity for Identical or Near-Identical Duties
A major and persistent anomaly is the unequal pay for similar posts across departments and services.
For example, officers in the Central Secretariat Service (CSS), CBI, IB, and Police draw higher pay and grade pay compared to similarly placed officers in departments such as CBIC, CBDT, Railways, Postal Services, and Central Ministries performing equivalent administrative or supervisory duties.
This disparity violates the principle of “equal pay for equal work”, reaffirmed by the Supreme Court in State of Punjab v. Jagjit Singh (2016) 14 SCC 267, which held that parity must be ensured when duties and responsibilities are substantially similar.
The 6th CPC (2008) itself acknowledged anomalies arising from unequal grade pay fixation and recommended a rationalized structure. Yet, these were only partially implemented, perpetuating inequities.
Recommendation:
The 8th CPC should conduct a comprehensive inter-departmental job evaluation and recommend uniform pay levels for employees performing equivalent duties, regardless of cadre or ministry.
This would align with ILO Equal Remuneration Convention, 1951 (No. 100), which India has ratified, and reaffirm the constitutional guarantees of equality under Articles 14 and 39(d).
- Compression of Pay Between Seniors and Juniors (Violation of Hierarchical Parity)
Pay compression and inversion—where juniors draw higher pay or pension than seniors—has become a systemic issue. The problem intensified after the 6th and 7th CPCs due to uniform fitment formulas and the flawed Pay Matrix design.
This anomaly not only demotivates serving employees but also results in pension disparities between seniors and juniors.
The “One Rank, One Pension” (OROP) principle, successfully implemented for Defence personnel after the Supreme Court’s observations in Indian Ex-Servicemen Movement v. Union of India (2022), should be extended to civilian Central Government services such as CBIC, CBDT, and Postal Departments, where identical ranks currently receive unequal pensions.
Recommendation:
Adopt the One Rank One Pension formula across all Central Government departments to ensure parity for those with identical rank and length of service. The Department of Pension and Pensioners’ Welfare (DoPPW) should be tasked with creating a unified pension matrix ensuring hierarchical fairness.
- Differential Pension Fixation and Inconsistent Revision Rules
After each Pay Commission, different ministries have interpreted pension revision formulas differently, leading to unequal outcomes for retirees who had identical last pay or rank.
The Department of Expenditure’s OMs on pension revision (e.g., OM dated 12.05.2017 following the 7th CPC) allowed multiple interpretations, resulting in a flood of CAT and High Court cases.
The SPS Vains (Retd.) v. Union of India (2008) judgment reaffirmed that pensioners of the same rank cannot be treated differently merely because of their date of retirement. However, administrative circulars continue to ignore this principle.
Recommendation:
The 8th CPC must prescribe statutory uniform pension fixation rules, with no discretionary interpretation by individual ministries.
- Non-Uniform Implementation and Selective Dilution of Recommendations
Implementation has been inconsistent across departments. Ministries have either modified, delayed, or diluted Pay Commission recommendations through internal notes and selective clarifications.
The Public Accounts Committee (2018) criticized the absence of a centralized monitoring mechanism and recommended a single uniform order for all Central Government departments.
Recommendation:
Establish an Independent Implementation and Monitoring Authority under the Cabinet Secretariat to ensure uniform adoption of Pay Commission recommendations, with power to review anomalies within six months of notification.
- NFFU (Non-Functional Financial Upgradation) Related Anomalies
The introduction of NFFU for IAS and other Group-A services (based on DoPT OM dated 24.04.2009) created automatic pay and pension enhancement for these cadres without equivalent provisions for others.
This has widened disparities across services and violated the equality principle of Articles 14 and 16. The 7th CPC noted these anomalies but stopped short of recommending parity.
Recommendation:
The 8th CPC should either extend NFFU to all organized services or replace it with a universal Time-Bound Promotion Framework applicable to all cadres.
- Family Pension and Commutation Anomalies
Inconsistencies persist in family pension calculation, commutation value, and restoration timelines.
Currently, commuted portions are restored after 15 years, which is inequitable given falling interest rates and life expectancy data.
Parliament’s Standing Committee on Pensions (2022) recommended reducing the commutation restoration period to 10 years, citing parity with global practices (e.g., UK Civil Service Pension Scheme and US Federal Retirement System, which restore full pension benefits within 8–10 years).
Recommendation:
• Reduce commutation restoration period to 10 years.
• Introduce automatic annual indexation of family pensions to neutralize inflationary erosion.
- Indexation and Dearness Allowance (DA) Reconciliation
Long-retired pensioners, particularly those who retired before 2006, continue to face real income erosion because of outdated DA merger mechanisms.
The Ninth Report of the Seventh Central Pay Commission (2015) itself warned that inadequate indexation will hurt pension adequacy for older retirees.
Recommendation:
• Merge DA with basic pension automatically whenever DA crosses 50%, as recommended by several Parliamentary Committees.
• Introduce a “Pension Indexation Formula” linked to the Consumer Price Index for Senior Citizens (CPI-SC), similar to models used in Canada and Australia.
- Parity Between Pre-2004 (OPS) and Post-2004 (NPS) Employees
The dual-pension regime has created a “two-nation workforce” — one with assured defined benefits and another with uncertain, market-linked pensions.
The Parliamentary Committee on Personnel, Public Grievances and Pensions (2023) recommended reintroducing a Guaranteed Minimum Pension (GMP) under NPS and revisiting the Old Pension Scheme (OPS) for fairness.
Recommendation:
The 8th CPC must evaluate the actuarial and equity implications of both systems and propose a hybrid model ensuring minimum guaranteed pensions and inflation protection for all retirees.
- MACP and NFGP Anomalies
The Modified Assured Career Progression (MACP) scheme, introduced in 2008, continues to face serious anomalies in implementation.
• The counting of Non-Functional Grade Promotion (NFGP) as one upgradation under MACP has unfairly deprived many employees of their rightful benefits.
• Courts such as CAT Principal Bench in OA No. 2124/2014 (All India Customs & Central Excise Gazetted Executive Officers Association v. UOI) have ruled against such arbitrary interpretation.
Recommendation:
• NFGP should not be treated as an upgradation under MACP.
• Introduce time-bound promotions at 8, 16, and 24 years uniformly across departments to remove intra- and inter-departmental disparities.
- Additional Reforms
• LTC for Pensioners: Extend Limited Travel Concession benefits to retirees at least once every two years to maintain social and familial connectivity.
• Medical and Foreign Treatment Facilities: In line with the OECD’s 2021 recommendation on Elder Care and Social Protection, establish comprehensive health coverage for pensioners, including foreign treatment options through public-private insurance partnerships.
Conclusion
The persistence of these anomalies over nearly four decades has not only demoralized serving employees but also forced thousands of pensioners into litigation.
The 8th Pay Commission must therefore:
1. Publish a clear corrective roadmap for each anomaly,
2. Set a definite timeline for resolution, and
3. Establish an independent monitoring authority to ensure compliance.
Only through such institutional reform can the Pay Commission restore credibility to the principles of fairness, equity, and parity — the foundational pillars of India’s civil service compensation system.
( to be continued)
Appeal to All Members — For Critical Review & Constructive Discussion
The Central Pay Commission (Part- IX)