8th CPC – Cabinet approves Terms of Reference of 8th Central Pay Commission

Reference for 8th Central Pay Commission

8th CPC

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today approved the Terms of Reference of 8th Central Pay Commission.

The 8th Central Pay Commission will be a temporary body. The Commission will comprise of one Chairperson; One Member (Part Time) and one Member-Secretary.  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. While making the recommendations the Commission will keep in view the followings:

i.   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 private sector.

Background:

The Central Pay Commissions are periodically constituted to go into various issues of emoluments structure, retirement benefits and other service conditions of Central Government employees and to make recommendations on the changes required thereon. 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 Government had announced formation of the 8th Central Pay Commission in January, 2025 to examine and recommend changes in the Salaries and other benefits of Central Government employees.

– PIB

Key Highlights:

• Approval: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC).
• Nature: The 8th CPC will be a temporary body.
• Composition:
  • 1 Chairperson
  • 1 Member (Part-Time)
  • 1 Member-Secretary
• Timeline: The Commission will submit its recommendations within 18 months of constitution.
• Interim Reports: It may submit interim reports on specific matters as recommendations are finalized.

Key Considerations:
i. Current economic conditions and the need for fiscal prudence.
ii. Ensuring resources for developmental and welfare expenditure.
iii. Addressing unfunded non-contributory pension costs.
iv. Financial impact on State Governments.
v. Comparison with Central PSUs and private sector pay structures.

Background:

Central Pay Commissions are set up every 10 years to revise emoluments, pensions, and service conditions.

The 8th CPC was announced in January 2025.

Its recommendations are expected to take effect from January 1, 2026.