Cabinet approves terms of reference for 8th Central Pay Commission

New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Terms of Reference (ToR) for the 8th Central Pay Commission, paving the way for a comprehensive review of the pay structure, allowances, and service conditions of Central Government employees.

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The 8th Central Pay Commission will be constituted as 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 its constitution. It may, if necessary, submit interim reports on specific matters as and when recommendations are finalized.

According to the approved ToR, while making its recommendations, the Commission will take into account several key considerations, including the country’s economic conditions and fiscal prudence, the need to ensure adequate resources for developmental and welfare expenditure, the unfunded costs of non-contributory pension schemes, and the financial impact on State Governments, which generally adopt pay commission recommendations with certain modifications. The Commission will also review the prevailing pay structures, benefits, and working conditions in Central Public Sector Undertakings (CPSUs) and the private sector.

Central Pay Commissions are periodically constituted by the Government to examine and recommend revisions in salaries, retirement benefits, and other service conditions of Central Government employees. Historically, these commissions have been constituted at intervals of about ten years. Accordingly, the recommendations of the 8th Central Pay Commission are expected to come into effect from January 1, 2026.

The Government had earlier announced the formation of the 8th Central Pay Commission in January 2025 to examine and recommend revisions in pay and related benefits for Central Government employees, in line with evolving economic and fiscal conditions.

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