8th Central Pay Commission: Centre approves Terms of Reference | Full details

The Union Cabinet, which was chaired by Prime Minister Narendra Modi, approved the Terms of Reference of the 8th Central Pay Commission on Tuesday. This is a step further in creating the panel that recommends massive changes to the structure of the salaries of government employees.

The Union Cabinet said in a statement that the 8th Central Pay Commission will be a temporary body, comprising a chairman, a part-time member, and a secretary. The pay recommendation will be made within 18 months.

What the statement said

"The 8th Central Pay Commission will be a temporary body. The Commission will comprise one Chairperson, one Member (Part-Time), and one Member-Secretary," the statement reads.

"It will make its recommendations within 18 months of the date of its constitution. It may consider, if necessary, sending interim reports on any of the matters as and when the recommendations are finalized," it added.

The statement says that the government will make recommendations based on the economic conditions of the country, keeping in mind fiscal prudence.

"While making the recommendations, the Commission will keep in view the following: The economic conditions in the country and the need for fiscal prudence; ii. The need to ensure that adequate resources are available for developmental expenditure and welfare measures; iii. The unfunded cost of non-contributory pension schemes; iv. The likely impact of the recommendations on the finances of the State Governments, which usually adopt the recommendations with some modifications; and v. The prevailing emolument structure, benefits, and working conditions available to employees of Central Public Sector Undertakings and the private sector," it said.

What are Central Pay Commissions?

The Central Pay Commissions are constituted to evaluate the emoluments structure, retirement benefits, and other service conditions of central government employees and to make recommendations on the changes required.

"Usually, the recommendations of the pay commissions are implemented after a gap of every ten years. Going by this trend, the effect of the 8th Central Pay Commission recommendations would normally be expected from 01.01.2026," the statement said.

The government announced the formation of the 8th pay panel in January 2025.