In a significant development, the Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday, gave a green light to the terms of reference (ToR) for the 8th Central Pay Commission.
A temporary body comprising a chairperson, a part-time member, and a member-secretary will form the 8th Central Pay Commission. The Union Cabinet mandated the commission to submit its recommendations within 18 months from the date of its constitution.
The panel may also submit interim reports on specific matters as and when required and when its recommendations are finalised. As per the DD news report, the pay commission will take into account the prevailing economic conditions in the country and the need for fiscal prudence while ensuring sufficient resources for developmental and welfare expenditure.
The pay panel will also gauge the financial implications of non-contributory pension schemes, the likely impact of its recommendations on State government finances, and the emolument structures, benefits, and working conditions in Central Public Sector Undertakings (PSUs) and the private sector.
What is the Central Pay Commission?
The Government of India periodically establishes Central Pay Commissions to assess and propose modifications to the salary structure, retirement perks, and service terms of its employees.
The Union government typically forms these commissions every ten years and implements their suggestions in accordance with that cycle. Following this tradition, it expects to enforce the 8th Central Pay Commission’s recommendations starting January 1, 2026.
In January 2025, the NDA government announced its decision to establish the 8th Pay Commission to review and revise Central government employees’ salaries, allowances, and related benefits.
