The Union Cabinet on Wednesday approved the terms of reference (ToR) for the 8th Central Pay Commission, setting the stage for the next major revision of salaries, pensions, and allowances for central government employees and pensioners. The move is expected to impact the financial structure of millions of government workers and retirees across India.
The commission, which will review and recommend pay structures, is expected to consider factors such as inflation, living costs, and the need to maintain parity between government and private sector pay scales. The decision to set up the commission follows the periodic revision process, with the last — the 7th Pay Commission — implemented in 2016.
Officials said the 8th Pay Commission will study existing pay anomalies, service conditions, and benefits to ensure fairness and financial stability for employees. It will also take into account the government’s broader fiscal responsibility and budgetary limitations while making its recommendations.
A senior government official stated, “The formation of the 8th Pay Commission underscores the government’s commitment to the welfare of central employees and pensioners. The panel’s recommendations will help ensure that salaries reflect present-day economic realities.”
Once the commission submits its report, its proposals will be reviewed and implemented after Cabinet approval, likely within the next two years. The announcement has already generated anticipation among more than one crore central government employees and pensioners, who are hoping for a significant hike in pay and improved benefits.
The 8th Pay Commission’s recommendations are expected to come into effect around January 2026, continuing the decade-long cycle of pay revisions that have shaped India’s public sector compensation system.