Cabinet Approves Terms Of Reference For 8th Central Pay Commission

New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved the Terms of Reference for the 8th Central Pay Commission, marking a key step in the process to review and revise the pay structure and service conditions of central government employees.

According to an official release, the 8th Central Pay Commission will function as a temporary body comprising one Chairperson, one Part-Time Member, and one Member-Secretary. The Commission has been directed to submit its recommendations within 18 months from the date of its constitution and may, if necessary, submit interim reports on specific matters as and when finalised.

While formulating its recommendations, the Commission will take into consideration the prevailing economic conditions in the country and the need for fiscal prudence, the release added.

"This is a very significant decision. In January itself, in-principle approval was given for the formation of the 8th Pay Commission, and within such a short time, the 8th Central Pay Commission has also been constituted," said Union Minister Ashwini Vaishnaw during the press conference in the national capital.

It will also assess the requirement to ensure sufficient resources for developmental expenditure and welfare measures, the unfunded cost of non-contributory pension schemes, and the likely financial implications for State Governments, which typically adopt similar recommendations with modifications.

In addition, the Commission will examine the existing pay structure, benefits, and working conditions of employees in Central Public Sector Undertakings and the private sector.

Central Pay Commissions are periodically constituted to examine issues related to emoluments, retirement benefits, and service conditions of central government employees and to recommend necessary changes. Usually, the recommendations of the pay commissions are implemented after a gap of every ten years.

The 7th Pay Commission's recommendations were implemented from January 1, 2016, although the Union Cabinet approved its implementation on June 29, 2016. Going by this trend, the effect of the 8th Central Pay Commission recommendations would normally be expected from 01.01.2026.

The Government had announced the formation of the 8th Central Pay Commission in January 2025 to review and recommend revisions in the salaries and benefits of Central Government employees, continuing the established process of periodic review and reform in public sector compensation.

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