Cabinet Approves Terms of Reference for 8th Central Pay Commission

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), paving the way for a comprehensive review of salaries, allowances, and pension structures of Central Government employees.

According to the official announcement, the 8th CPC will be a temporary body comprising a Chairperson, one Part-Time Member, and one Member-Secretary. The Commission is mandated to submit its recommendations within 18 months from the date of constitution and may submit interim reports if necessary.

Key Considerations for the 8th CPC

While making its recommendations, the Commission will keep in view:

• The economic conditions of the country and the need for fiscal prudence.

• The need to ensure adequate resources for developmental and welfare expenditure.

• The unfunded cost of non-contributory pension schemes.

• The impact of recommendations on State finances, as States often adopt CPC recommendations with modifications.

• The prevailing pay and benefits structure in Central Public Sector Undertakings (CPSUs) and the private sector.

Background

Central Pay Commissions are periodically constituted to review the emoluments and service conditions of Central Government employees and make suitable recommendations. Traditionally, each Commission’s recommendations are implemented after a gap of around ten years. Following this trend, the recommendations of the 8th CPC are expected to come into effect from January 1, 2026.

The Government of India had earlier announced the formation of the 8th Central Pay Commission in January 2025, tasked with examining and recommending changes in salaries, allowances, and retirement benefits for Central Government employees.