“A Central Pay Commission is not just about salaries; it is about restoring trust, motivating those who serve the nation, and strengthening the spine of public administration.”
Lee Kuan Yew, the legendary former Prime Minister of Singapore, famously remarked: “If you pay peanuts, you only get monkeys.” He adopted a balanced yet uncompromising “carrot and stick” approach towards the civil services—offering globally benchmarked salaries to bureaucrats while imposing strict penalties for corruption. The result is an efficient, high-integrity bureaucracy that remains a global model even today.
Despite the many shortcomings of the British Raj, one aspect merits attention: corruption levels in the later colonial administration were relatively low. After the East India Company’s rule ended, the imperial administration enforced firm intolerance toward graft. Over a century ago, the Islington Commission (1917) articulated a timeless principle regarding pay and integrity:
“Government should pay so much, and so much only, to its employees as is necessary to obtain recruits of the right stamp, and to maintain them in such degree of comfort and dignity as would shield them from temptation and keep them efficient for the term of their services.”
The 8th Pay Commission
On 28 October 2025, the Union Cabinet approved the constitution of the 8th Central Pay Commission (8th CPC), which is expected to submit its recommendations within 18 months. As is customary, its recommendations are likely to take effect from 1 January 2026.
While framing its recommendations, the Commission must consider:
- India’s broader economic and fiscal conditions,
- the need to preserve resources for welfare and development,
- the significant unfunded cost of non-contributory pensions,
- the implications for State Government finances,
- and the existing pay structures in Central PSUs and the private sector.
Implications of the 8th Pay Commission
Preliminary estimates suggest:
- Minimum basic pay may rise from ₹18,000 (7th CPC) to ₹46,000–₹51,000.
- The fitment factor may increase from 2.57x to 3.68x–3.80x, implying a 40–45% hike in basic pay.
- This will proportionately raise HRA, DA, TA, and other allowances linked to basic pay.
The 8th CPC thus arrives at a decisive moment—when India needs a civil service that is efficient, equitable and fiscally responsible. Incorporating performance-linked incentives, non-monetary benefits, and specialised talent pipelines will be essential to attract and retain top-tier professionals.
Key challenges before the 8th Pay Commission
1. Balancing Responsibilities, Skills and Equity
The Commission must reassess pay, allowances and benefits across all government categories, including defence and paramilitary personnel, ensuring that compensation reflects responsibility, skill and risk.
2. Fiscal Responsibility
Any pay revision must align with the Fiscal Responsibility and Budget Management (FRBM) framework.
3. Unfunded Pension Liabilities
Unfunded pensions remain a major burden. Labelling them merely as “non-funded” is unjust to pensioners—who, as the Supreme Court has held, receive pension not as charity, but as deferred compensation for service. The Commission must ensure fairness while addressing sustainability.
4. Perception of Bias
There is long-standing public perception that past Pay Commissions have favoured the IAS and a few elite services in pay, status, promotion and empanelment. The CPC may continue the traditional edge for the IAS, citing their coordinating role and grassroots administrative experience. Nevertheless, it must ensure that trust, dignity and equity are upheld across all services.
5. Operational Risk in Paramilitary Forces
The Commission must recognise the high operational risk borne by paramilitary forces. Pay structures must reflect empirical realities: field exposure, stress, danger, workload and responsibility.
Also Read: How Colonels and Brigadiers ended up with higher Pay and Pension than Generals
Comparative Benchmarking
To build a modern compensation system, the 8th Pay Commission must:
- Benchmark government salaries with private sector roles requiring comparable skills,
- Study international civil service pay models,
- Identify best-practice approaches that balance fairness with fiscal discipline.
Motivation, Retention and Human Capital Development
Attracting and retaining high-quality talent—especially for specialised roles—requires a holistic approach. Compensation is only one aspect. The Commission should emphasise:
- better work environments,
- clear career paths,
- structured training and upskilling,
- and modern flexible work policies.
Efficiency and Integrity
Many citizens view government departments as costly and inefficient “white elephants.” Since salary hikes are funded by taxpayers, society expects commensurate returns in the form of:
- more efficient delivery of public services,
- higher integrity and accountability,
- and measurable improvement in governance.
The UN’s indicators of good governance underscore that an efficient civil service is indispensable. The CPC must therefore recommend mechanisms to enhance productivity, evaluation systems, periodic skill upgrades, and internal accountability—ensuring that pay hikes translate into better outcomes.
Corruption: A Growing Threat
India’s rank in Transparency International’s Corruption Perception Index (CPI) has declined:
78 (2019), 80 (2020), 85 (2022), 93 (2023), and 96 (2024).
The CPI corruption ranking ranges from 0 (least corrupt) to 100 (highly corrupt).
The Pay Commission must confront this reality. Higher salaries must correlate with lower corruption, ensuring that officials can live on legitimate income and have no incentive—or excuse—to misuse authority. A zero-tolerance policy must be built into the governance ecosystem.
Retirement Age
The retirement age for central government employees was raised from 58 to 60 in 1998 based on the Fifth CPC’s recommendation. Given rising life expectancy and the need for experienced personnel, there is a strong case for raising the retirement age to 65—already adopted for doctors and university faculty. Such an extension could be made optional, ensuring continuity without increasing fiscal burden disproportionately.
Conclusion
The twin evils of inefficiency and corruption must be tackled with uncompromising resolve. Wrongdoers must face swift and certain punishment, rather than prolonged procedural delays that dilute accountability.
The 8th Pay Commission carries the responsibility of shaping a civil service that is:
- honest,
- efficient,
- highly skilled, and
- committed to timely, transparent public service delivery.
Its recommendations must therefore go beyond pay hikes. They must help forge a bureaucracy that is worthy of public trust, aligned with national development goals, and capable of meeting the rising expectations of a young, aspirational India.
