New Delhi: The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), marking a significant step toward revising the pay and benefits structure of Central Government employees.
According to the official announcement, the 8th Central Pay Commission will function as a temporary body consisting of a Chairperson, one Part-Time Member, and a Member-Secretary. The Commission has been tasked to submit its recommendations within 18 months from the date of its constitution. It may also issue interim reports as deemed necessary during the review process.
While formulating its recommendations, the Commission will take into account:
- The economic conditions of the country and the necessity for fiscal prudence;
- The importance of maintaining adequate resources for developmental and welfare expenditure;
- The unfunded cost associated with non-contributory pension schemes;
- The potential impact on State Government finances, which often follow the Centre’s recommendations with modifications; and
- The existing emolument structures, benefits, and working conditions in Central Public Sector Undertakings and the private sector.
Background
The Central Pay Commissions are periodically set up to review and recommend changes in the emoluments, retirement benefits, and service conditions of Central Government employees. Traditionally, these reviews occur roughly every ten years, with implementation following soon after.
Following this pattern, the recommendations of the 8th CPC are expected to take effect from January 1, 2026.
The formation of the Commission was first announced in January 2025, with the objective of ensuring that compensation structures remain fair, competitive, and aligned with evolving economic realities.
The approval of the ToR now sets the stage for a comprehensive review that could potentially impact the salaries, pensions, and allowances of over 47 lakh Central Government employees and 68 lakh pensioners across India.
Source: PIB
Also Read: First Gallery of Yuge Yugeen Bharat Museum Set to Open by 2026-End