In a key administrative move, the Union Cabinet chaired by Prime Minister Narendra Modi on 28 October 2025 approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC). The decision paves the way for a systematic review of salary structures, pensions, and service conditions of Central Government employees — a process crucial for maintaining equity and efficiency in public administration.
Composition and Tenure
The 8th CPC will be a temporary body comprising:
- Chairperson
- One Part-Time Member
- One Member-Secretary
It is mandated to submit its recommendations within 18 months from its constitution, with the flexibility to present interim reports on urgent matters.
Core Objectives and Considerations
The Commission will evaluate and recommend revisions by considering:
- Economic and fiscal conditions to ensure sustainability.
- Balanced resource allocation between employee welfare and development goals.
- Pension liabilities and their long-term financial implications.
- Impact on State finances, as states often mirror central pay structures.
- Comparison with CPSUs and private sector compensation models.
Background and Significance
The Central Pay Commissions, constituted roughly every 10 years, play a vital role in aligning public sector pay scales with inflation and changing economic realities. The 7th CPC was implemented in 2016, and the 8th CPC’s recommendations are expected to take effect from 1 January 2026.
Announced in January 2025, this latest commission aims to ensure a smooth transition to the next pay revision cycle — reaffirming the government’s commitment to fiscal prudence and employee welfare.
