Er. Manamohan Rajbongshi
Secretary General
All India Federation of Diploma Engineers
Q1. Implementation of the recommendations of a Pay Commission has macro-economic impacts. Some of these are positive in terms of boost to consumption and savings whilst others are negative in terms of the higher fiscal deficit, inflationary potential & crowding out of other expenditure such as for overall development & public welfare. Decisions in this regard involve choices. Based on the current state of the economy & the country’s aspirations, what should be the guiding philosophy that must underpin the overall approach of the 8 CPC?
Answer:
The guiding philosophy of the 8th CPC should be inclusive, balanced and growth-oriented. As a welfare state, India depends on a motivated and secure public workforce to deliver essential services and development outcomes. Fair compensation is not merely a fiscal decision but an instrument of social justice and administrative efficiency.
At the same time, macroeconomic stability must be preserved. The 8th CPC should adopt a calibrated approach that protects employees’ real income against inflation, ensures dignity of service, and sustains morale, while aligning with fiscal prudence. Increased pay has multiplier effects through consumption, savings and domestic demand, which can stimulate economic growth.
The Commission should also recommend periodic managerial and functional audits using scientific performance matrices to enhance accountability and productivity. Thus, the guiding philosophy should integrate employee welfare, national development priorities, and fiscal sustainability—ensuring that compensation reform strengthens both governance and economic resilience.
Q2. Pay determination in organizations including Government involves “horizontal relativity” i.e. for analogous posts across domains/cadres being placed in the same level/scale & “vertical relativity” i.e. on promotion, transition to a higher scale/band of pay. Relativity within different posts of Government has been broadly established over time. However, relativity/positioning between pay and perquisites in Government and the private sector is less established. How should the 8th CPC assess/evaluate relativity between pay & perquisites in Government and the public/private sector?
Answer:
The 8th CPC should adopt a structured benchmarking framework comparing total compensation—basic pay, allowances, job security, pension, medical coverage and work-life balance—rather than only headline salary figures. Government service includes intangible benefits such as tenure security, social prestige and public service orientation, while the private sector often provides higher variable pay but less security.
Relativity must therefore be assessed on a “total reward” basis. For technical and professional roles, especially engineers, market-linked data from comparable industries should inform evaluation to prevent talent erosion. At the same time, the principle of “equal pay for equal work” within Government must be preserved to avoid distortions.
Performance-based incentives, transparent appraisal systems and measurable outputs should be incorporated. A balanced model—ensuring competitive but not excessive parity with the private sector—will protect fiscal discipline while sustaining talent attraction and retention in public service.
Q3. Should 8th CPC consider uniform horizontal relativity across all government departments, or should it consider sector-specific benchmarking where government functions are compared with their respective industry peers? For instance, should compensation for government engineers be benchmarked against private sector engineering firms, financial officers against the BFSI sector, and healthcare professionals against private healthcare? What would be the advantages and implementation considerations of such an approach?
Answer:
AIFODE supports maintaining broad uniform horizontal relativity across Government to preserve administrative cohesion and equity. However, the nature, complexity and responsibility of duties must be factored in through rational pay levels and specialized allowances.
Sector-specific benchmarking can provide useful reference data, especially for technical cadres like engineers, healthcare professionals and finance specialists. The advantage of this approach is improved competitiveness in talent-sensitive roles and reduced attrition. However, excessive sectoral differentiation may create fragmentation, inter-cadre imbalance and fiscal unpredictability.
Therefore, the 8th CPC should adopt a hybrid approach: retain a common pay structure for parity and institutional stability, while permitting calibrated adjustments or professional allowances for roles with demonstrable market disparity. Clear criteria, periodic review, and transparent methodology will be essential for effective implementation.
Q4. Security of tenure, a training regimen, housing, leave encashment, predictable increments, medical coverage, time bound progression, inflation indexed salary, retiral benefits are certain features associated with most jobs in Government. How should these be factored in while crafting a compensation matrix and relative positioning viz-a-vis the private sector?
Answer:
These features represent deferred and social security components of Government compensation and must be quantified as part of the total remuneration package. While private sector salaries may appear higher in gross terms, Government employment provides stability, pensionary assurance, inflation-indexed dearness allowance, structured career progression, and comprehensive medical benefits.
The 8th CPC should develop a transparent valuation model assigning notional weightage to tenure security, post-retirement benefits and risk coverage. This will enable objective comparison with private sector compensation. However, these benefits should not be used to justify stagnation in basic pay. Real wages must remain fair and dignified.
A balanced compensation matrix should recognize that job security and pension are institutional strengths, but they cannot substitute competitive pay for skilled and technical personnel. The objective should be to maintain the attractiveness of public service while ensuring fiscal sustainability.
Q5. Government employment is part of the organized sector. A far larger proportion of the job force is in the informal sector and the gig economy. What influence do you think entry level pay scales implemented by Government have on compensation practices in the informal or gig sector?
Answer:
Government entry-level pay scales often serve as a moral and economic benchmark within the labour market. As the largest formal employer, the government sets standards for minimum wages, social security norms, and structured increments. These benchmarks indirectly influence wage negotiations in organized and semi-organized sectors.
An inclusive salary policy can create upward pressure on compensation practices in the broader economy, particularly where state contracts and public works are involved. The informal and gig sectors form the backbone of national productivity, yet remain vulnerable and unstructured.
While Government pay scales cannot directly regulate gig compensation, they can establish normative standards that shape labour codes, minimum wage notifications and social protection policies. Therefore, pay determination should reflect fairness, scientific assessment, and social responsibility, reinforcing the broader objective of equitable economic development.
Q6. Salaries in Government have a distinct element of compensation for length of service (increment, usually annual), an element of neutralization for changes in cost of living/inflation (dearness allowance) & an element for higher responsibilities based on seniority/merit (pay scale on promotion). In that context, what do you think the “fitment factor” adopted by Pay Commissions should represent? What should such a fitment factor principally aim for?
Answer:
The fitment factor should represent a comprehensive correction of accumulated erosion in real wages, structural anomalies and inflation impact since the previous Pay Commission. It must ensure meaningful enhancement rather than a symbolic revision.
AIFODE recommends a fitment factor of 3.5 to adequately restore purchasing power, maintain dignity of service and correct disparities. The factor should reflect cost of living trends, productivity growth, fiscal capacity and national income expansion.
Principally, the fitment factor must aim at equitable upward revision across all levels, protect lower and middle cadres from stagnation, and maintain rational vertical relativity. It should serve as a structural reset that strengthens morale, boosts demand in the economy and ensures administrative efficiency.
Q7. Salary of a Secretary in the Central Government typically represents the apex or the pinnacle i.e. the highest end of the scale. What should be the principle for determining this? Should there be a variable pay component for such position?
Answer:
The salary of a Secretary should be determined on the principle of constitutional responsibility, administrative leadership and public accountability. However, internal pay equity must be preserved. AIFODE supports maintaining a maximum 1:7 ratio between the lowest and highest pay to ensure fairness and social balance.
Excessive widening of pay differentials can create institutional imbalance and weaken morale across cadres. While performance evaluation is important, introducing a large variable pay component at the apex may compromise neutrality and collective ethos in public service.
If considered, any variable element should be modest, transparent and linked to institutional outcomes rather than individual discretion. The guiding principle should remain equity, accountability and integrity within the administrative structure.
Q8. How can pay scales for all Group A Services be fixed so as to attract candidates of the requisite caliber? Should pay scales be more attractive at entry point or later, after a few years in service? What principles should guide such differentiation to ensure competitive positioning for talent-critical roles while maintaining fiscal prudence?
Answer:
To attract high-caliber candidates, entry-level pay must be competitive and dignified. Early career compensation plays a decisive role in career choice, especially for technically qualified professionals. Therefore, remuneration should be attractive from the beginning rather than heavily back-loaded.
Scientific manpower planning, real-time economic analysis and structured SWOT assessment of employee–employer relations should guide pay design. Talent-critical roles may receive calibrated professional allowances without disturbing overall parity.
At the same time, structured career progression, transparent promotion policies and performance-linked recognition should sustain long-term motivation. Fiscal prudence can be maintained through rational cadre management and productivity audits. The objective should be to combine competitive entry compensation with predictable growth pathways.
Q9. How should rates and frequency of increments in respect of different scales of pay be determined? Should these be uniform or vary across scales/ time periods during service?
Answer:
Increment policy should balance uniformity with performance sensitivity. A base annual increment may remain uniform across scales to ensure predictability and administrative simplicity. However, additional increments or accelerated progression should be linked to measurable performance and skill upgradation.
Reward and accountability must guide the system. Transparent appraisal mechanisms, digital performance metrics and periodic review can ensure fairness. Lower cadres should be protected from stagnation, while higher responsibilities should attract proportionate increments.
A mixed approach—uniform basic increment with performance-linked enhancement—would preserve morale, encourage efficiency and maintain fiscal discipline.
Q10. Over course of time, many allowances have been introduced or rationalized based on specific nature of work, expenses such as on travel, compensation for hardship/risk/peculiarities associated with place of posting etc. Most of these are partially inflation indexed. An alternative approach has been the Cafeteria Approach followed by Central Public Sector Enterprises (CPSEs), wherein except for a handful of allowances, executives choose from a set of perquisites & allowances, subject to an overall ceiling of basic pay. Which approach do you think is more appropriate for Central Government employees?
Answer:
AIFODE believes a rationalized, structured allowance system is more suitable for Central Government employees than a full cafeteria model. Government service operates on standardized rules, audit scrutiny, and equity principles, which may be diluted by excessive flexibility.
However, limited optional components may be introduced within defined ceilings to accommodate diverse needs such as housing, transport or education. Core allowances related to risk, hardship, field duty, and technical responsibilities must remain fixed and transparently indexed to inflation.
A hybrid approach—structured base allowances with limited choice-based components—would combine administrative simplicity, transparency, and employee flexibility. This ensures fairness across cadres while addressing evolving professional and geographic realities.
Q11. The Seventh Pay Commission had assessed that in January, 2014, there were about 47 lakh serving Central Government personnel. This include CAPF, Railways & Defence forces. The number of pensioners was just short of 52 lakh. In 2025 – 26, the number of Central Government personnel stands at about 50 lakh, which the number of pensioners is almost 70 lakh. The increase in the number of pensions has created additional demands on Government’s Budget. What approaches could help to satisfy reasonable expectations of pensioners whilst keeping the fiscal impact within manageable limits?
Answer:
Adequate staffing is essential for service delivery. The sanctioned strength should be rationally increased and vacancies filled regularly to prevent workload concentration and future Pension imbalance. There is an urgent need of Pension sustainability which may acquire through multi – pronged strategy.
Pension is a social Welfare measure intended to ensure dignity and financial security in old age. Pensioner after decades of public service must be able to lead a decent and secured life post retirement. Therefore Pensions are lifeline for retired employees and their families. The Hon’ble Supreme Court has consistently held that Pension is not a bounty payable at the whim’s of the authority but a deferred portion of compensation for long and devoted service. It has further emphasized that retrial benefits from part of the right to livelihood under article 21 of the constitution of India.
After the discontinuation of Defined Pension under CCS Pension Rule 1972 ( now 2021) for Civilian employees since 01.01.2004. Employees recruited on or after 1st January, 2004 have started retired with a very nominal pension which no where meets the today’s cost of living. In the present social structure senior citizen are forced to stay away from home by their children. Be it so, restoration of the Old Pension scheme is to be considered by the 8th CPC.
Q12. The Seventh Pay Commission was constituted in 2014 and implemented from 1.1.2026. The period since then has been marked by a lower trajectory of inflation, as compared to earlier decades. This is also reflected in the All India Consumer Price Index (Industrial Workers) which is used for DA calculation. Should the 8th CPC explore a hybrid indexation approach that factors in both inflation protection and formal sector wage growth trends? What proportion might be reasonable for each component, and what implementation considerations would arise? What are your expectations on inflation/CPI increase over the next 10 years?
Answer:
Dearness Allowance is compulsory for employee, protecting their real income for some extent from inflation. The All India Price Index – Industrial Worker ( AICPI – IW) is a monthly measures of retail price changes for goods and service consumed by Industrial workers in India compiled by the labour Bureau. It is tracks for inflation to regulate Dearness Allowance for Central Government Employees and Pensioners. It measures the impact of Inflation on the purchasing power of Employees and Pensioners. Many items in the CPI basket are valued attention subsidized or ration rates whereas Employees and Pensioners purchase goods in their open retail market at significant higher prices.
Therefore a more realistic Index should be based on prevailing retail market prices or rates in Government Cooperative Consumers stores. We oppose any hybrid Indexation approach since the same may dilute inflation protection. We propose that the 8th CPC should recommend for a distinct Consumer Price Index for Central Government Employees and Pensioners for protection of real wages and prevent income erosion.
Q13. Railways, CAPF and Defence forces typically account for about 70% of Central Government personnel. What particular considerations, monetary or non-monetary should be factored in while determining their pay & allowances?
Answer:
These personnel form the operational backbone of national security and infrastructure. Risk exposure, hardship postings, mobility constraints, family separation and physical demands must be adequately compensated through risk allowances, hardship benefits and welfare support.
Non-monetary measures such as quality housing, healthcare, education facilities for children, and post-retirement rehabilitation are equally important.
While recognizing their special roles, the government must also ensure that other civilian employees contributing to nation-building are not comparatively undermined. Equity, morale and institutional harmony should guide the framework.
Q14. Scientists work in certain specialized streams/departments such as Department of Space, Department of Atomic Energy etc. What should be appropriate benchmarks to be kept in mind for fixing their emoluments?
Answer:
For scientists in institutions such as the Department of Space and the Department of Atomic Energy, emoluments should reflect qualification, specialization, research output and global benchmarks.
Compensation must remain competitive enough to prevent brain drain while respecting public finance constraints. Performance indicators may include patents, innovation outcomes, mission success and peer-reviewed contributions.
A balanced structure combining stable pay, research incentives and recognition-based rewards will sustain excellence and national scientific advancement.
Q15. Military Service Pay is currently admissible to personnel of Armed Forces. This was in recognition of the special nature of their duties. In that context and given the changing nature of their jobs, how should the pay of soldiers, sailors and airforce personnel be determined? How should it relate to the starting salary in Government or the pay of a constable in CAPF/ Police?
Answer:
Pay of Armed Forces personnel must reflect the unique demands of combat readiness, life risk, strict discipline and non-negotiable mobility. Military Service Pay (MSP) should be periodically reviewed to account for technological transformation and evolving operational challenges.
Starting salary should remain distinctly higher than equivalent civilian entry posts and appropriately above CAPF/Police constables, recognizing combat liability and service conditions. However, rational parity principles must be maintained to avoid inter-force disparities.
The framework should combine fair basic pay, MSP, hardship allowances and comprehensive rehabilitation support, ensuring dignity, morale and national security readiness.
Q16. The nation has many more military pensioners than serving military personnel. In 2025 – 26, outgo on Defence Pensions is likely to be higher than the outgo on Defence salary and allowances. As overall defence pension bill increases, in line with projections, impact will be visible on equipment and arms purchase, their maintenance and on modernization of defence forces. What changes would you recommend to contain increases in defence manpower costs and its pension bill?
Answer:
Containing defence pension growth requires structural reforms without compromising welfare. Measures may include calibrated manpower planning, increased use of technology to reduce non-combat roles, and phased absorption of retirees into civilian technical services.
Resettlement programs, skill transition initiatives, and enhanced contributory elements for future entrants may improve sustainability. Administrative efficiency and reduction of non-essential expenditure can protect modernization budgets.
Reforms must balance fiscal prudence with the national obligation to veterans. Pension security should not be diluted; instead, structural efficiency and long-term planning should ensure sustainability.
Q17. Productivity Linked Bonus (PLB) is paid to some employees of Government… How can the Bonus structure be reimagined for rewarding excellence in productivity & performance? Should PLB/ Ad-hoc Bonus continue to be given on uniform basis (e.g 60 days of salary for all) or be differentiated, based on individual performance?
Answer:
Bonus structures should transition from uniform entitlement to performance-sensitive models. While a minimum assured component may continue for morale, additional PLB should be linked to measurable productivity indicators, institutional targets and individual contribution.
Reward and accountability must be central. Transparent digital performance tracking and sector-specific benchmarks can ensure fairness. Extending PLB rationally to all productivity-contributing personnel will promote equity.
Differentiated bonus structures tied to real-time assessments can enhance efficiency while preserving collective spirit.
Q18. Contractual appointments in the form of lateral entry have been tried during the last few years. Do you think this should be expanded and other practices such as part-time work, flexi time etc. be introduced in Government at middle / higher levels to tap a bigger talent pool? What could be the pros and cons of doing so?
Answer:
Regular appointments ensure accountability, institutional continuity and long-term commitment. Excessive contractual engagement may weaken responsibility, sustainability and quality control in development projects.
While limited lateral entry can infuse specialized expertise, it must not replace structured cadre-based recruitment. Experiences in large public missions such as the Jal Jeevan Mission highlight the need for stable administrative ownership.
A balanced approach is advisable: strengthen regular recruitment, allow limited expert-based lateral induction with clear tenure norms, and preserve institutional memory and accountability.
