8th Pay Commission Terms of Reference and Pensioners fear

VK Bahuguna

November 24, 2025

(The writer is former IFS officer and Chairman of the Centre forResource Management and Environment)

The parliament had on 25th March 2025 had passed the legislation regarding validation of the CCS (Pension) Rules and Principles for expenditure on Pension liabilities from the Consolidated Fund of India as part of the Finance Bill 2025.The legislation validates the principle that without prejudice to the Pension Rules, the Central Government has the authority to establish distinctions among pensioners as a general principle and that a distinction may be made or maintained amongst the Pensioners, which may emanate from the accepted recommendations of the Central Pay Commissions, and in particular the distinction may be made on the basis of the date of retirement. The legislation has been made effective from 1.6.1972 thereby validating all Rules made under Article 309 of the Constitution for CCS (Pension) Rules, 1972, CCS (Pension) Rules, 2021, CCS (Extraordinary Pension) Rules, 2023 including all instructions issued thereunder as amended from time to time. Initially when the bill was passed after a great deal of noise made by central government employees, it was clarified that the pensioners will be unaffected by it. It was also hinted that this was done to secure the position of the government in a court case. This was a specific measure to address legal challenges and clarify the government's stance on pension parity issues, not a recurring annual process. General pension matters and amendments to rules are typically handled by the Department of Pension & Pensioners' Welfare through notifications and clarifications, not typically via annual validation in the Finance Bill.

It appears that this legislation was driven by legal precedent in cases like D.S. Nakara &others v. Union of India (1983), Union of India v. SPS Vains (2008), and All Manipur Pensioners Association v. State of Manipur (2020). These cases, particularly D.S. Nakara, established that pension is a right and that arbitrary classification of pensioners is prohibited under Article 14 of the Constitution, a principle that the new legislation aimed to address by giving the government specific legal authority to create distinctions among pensioners based on the date of retirement or other factors.The D.S. Nakara case is a landmark 1983 Supreme Court of India judgment that declared it unconstitutional for the government to discriminate against pensioners based on their retirement date. It therefore, interalia established equity and declared that all pensioners are one single class and it further stressed that pension is a statutory and vested right for the past service. The court struck down a government policy that created a cut-off date (March 31, 1979) for eligibility for a liberalized pension scheme, finding it to be arbitrary and a violation of Article 14.All pensioners who fall under the governing rules are entitled to have their pensions recomputed under a liberalized formula with effect from the date the scheme became effective. Similarly, he All Manipur Pensioners Association v. State of Manipur case is also a landmark Supreme Court decision that established pensionary parity for all pensioners, regardless of their retirement date. The core issue was that the government created a distinction between those who retired before and after a specific date (e.g., January 1, 1996) for pension revision purposes, which the Court deemed illegal and discriminatory, violating Article 14 of the Constitution. The Supreme Court ultimately ruled that all pensioners should receive the revised pension benefits at par with each other and ordered the payment of arrears. This laid the groundwork, emphasizing pension's role in ensuring dignified post-retirement life.The 44th Constitutional Amendment (1978) removed the right to property from fundamental rights (deleting Articles 19(1)(f) and 31) and relocated it to Article 300A as a constitutional right. Courts quickly extended this to pensions and therefore, pension is protected under Article 300Aas ordered in Krishna Kumar v. Union of India (1990), Supreme Court clarified that while no longer fundamental, any deprivation must follow "authority of law," meaning fair procedure and non-arbitrariness under Articles 14, 19, and 21 (right to life and livelihood).

This issue became hot again after the terms of reference of the 8th Pay Commission were announced on 28th October as more than 69 lakh pensioners are affected. The employees including associations ofCentral Government Employees federations including All India Services like IPS have submitted representation to President of India on this issue requesting to change then TORs. It is because the 7tpay commission mandate extended beyond pay and allowances to recommend a framework for revising pensions. The 8th CPC, however, focuses more only on “emoluments conducive to attracting talent and promoting efficiency,” without clear direction on pension revision for pre-existing retirees.

It appears that the government had passed this order to keep its options open to decide about who should get covered under 8th Pay Commission for pension taking a clue that deprivation of pension must follow authority of law and hence the mandarins in govt decided to pass this Bill. Though there exist a doubt whether govt will deprive 69 pensioners and their families but the wordings of the legislation are from retrospective dated of 1972 when the pension rules were framed and employees’apprehensions cannot be wished away. This has opened a pandora box for debate and the government must come out unequivocally on it. The political leadership must recognize that pension is not alms but a demandable constitutional right. The government must be thinking to limit the financial burden to deny or limit the hike in the pension purported increase after 8th pay commission implementation based on the date of retirement. Well, I hope the Prime Minister may have to intervene in this matter to avoid the sure legal wrangles in future. The government must cut flab rather thantaking discriminatory action on pension as the parity was restored between all pensioners after a long fight and it is the way to lead a dignified retire life after serving the country. 1000 words

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