Three major employee representative groups have collectively raised demands for pension reforms for central government employees and pensioners. The All India Defence Employees Federation (AIDEF), Maharashtra Old Pension Organisation and National Council – Joint Consultative Machinery (NC-JCM) collectively represent general central government employees, pensioners and defence civilians. Their recommendations are expected to play an important role in shaping the 8th Central Pay Commission (CPC) deliberations over the coming months. The latest developments show Uttar Pradesh government announced a 2% increase in Dearness Allowance for state government employees and pensioners, benefiting around 16 lakh beneficiaries with rates effective from 1 January 2026.
The NC-JCM has demanded that Dearness Allowance (DA) be updated into an inflation-linked wage model, while the Maharashtra Old Pension Organisation has suggested a minimum DA hike of 4% and DA merger at 50%. The AIDEF is seeking inflation-adjusted compensation demands. Recent developments show Finance Ministry approved a 2% increase in DA for central government employees effective from 1 January 2026, with the Indian Banks' Association (IBA) revising DA for bank employees for May, June and July 2026, resulting in increases ranging between ₹435 and ₹1,050 depending on salary slabs. Similarly, Indian Railways revised DA and Dearness Relief by 2% on 13 May, raising it to 60% of basic pay from 58% with retrospective effect from January 2026.
All three groups have demanded similar levels of fitment factor — 3.833, 3.8, and 3.833 respectively, which is the multiplier that converts old basic pay into revised basic pay. NC-JCM has demanded a hike in minimum basic pay for central government employees to ₹69,000, while Maharashtra Old Pension Organisation and AIDEF have both sought ₹65,000. NC-JCM is seeking unified pay matrix up to Level 13, Maharashtra Old Pension Organisation wants rationalisation of pay levels, and AIDEF is demanding cadre restructuring and skill-based pay. NC-JCM has also proposed 6% annual increment (from 3%).
NC-JCM is seeking structural alignment with revised pay, Maharashtra Old Pension Organisation wants OPS restoration + UPS reforms + DA linkage, and AIDEF is demanding pension parity with revised pay structure. The 8th Central Pay Commission has begun active discussions with stakeholders and invited applications from candidates for full-time and part-time consultant roles. It also opened the forum for memorandums from employees, their representatives and other stakeholders last month. The 8th CPC recommendations are expected to shape future revisions in salaries, allowances, and pension structures, with decisions potentially impacting nearly 50 lakh central government employees and around 65 lakh pensioners, including railway and defence personnel.
