Union Cabinet nod for 8th Central Pay Commission: What government employees should know

The Union Cabinet has approved the Terms of Reference (ToR) of the 8th Central Pay Commission, according to the PIB press release issued on October 28, 2025.

The release states that the 8th Central Pay Commission will be a temporary body that will study the pay structure, retirement benefits and other service conditions of central government employees.  The commission will submit its recommendations within 18 months of its official formation.

It is mentioned that the commission will consist of one Chairperson, one part-time Member and one Member-Secretary. According to the government release, the panel may also send interim reports if some parts of its recommendations are finalised earlier during the study period.

While preparing its recommendations, the commission is expected to carefully examine the country’s economic conditions and the importance of maintaining fiscal discipline. It must also ensure that the government has enough resources for welfare schemes and development programmes.

The PIB release stated that the commission will examine the financial burden imposed by pension schemes that lack a contributory structure. It will also study the probable impact of its decisions on state governments, which usually follow the central pay commission reports with a few changes of their own.

The pay and working conditions of employees in Central Public Sector Undertakings and the private sector will also be compared while preparing the final suggestions. This comparison is important to maintain fairness and competitiveness in salaries offered by the government, per the press release.

The Central Pay Commissions are set up every ten years to update salaries and retirement benefits of government employees. The last pay commission was the 7th Central Pay Commission, and its recommendations were implemented from January 1, 2016.

Accordingly, this means the recommendations of the 8th Central Pay Commission are expected to take effect from 1 January 2026 if the usual timeline is followed. The PIB press release also stated that the government had already announced the formation of the new commission in January 2025.