Ten months after announcing the 8th Pay Commission, the government has finally approved the Terms of Reference (ToR). ToR will serve as a blueprint for the panel, which will examine pay structures, allowances, and pension revisions for employees and retirees. The ToR will also set the boundaries and timeframe for the pay panel’s recommendations.
The 8th Central Pay Commission, which will be a temporary body working until the recommendations are implemented by the Centre, will now come out with a report after assessing various monetary and non-monetary benefits being provided to the serving employees and retirees. Based on past experiences, it can be said that the new pay panel might take about 18 months to submit its report to the government.
After the Cabinet meeting on Tuesday, Union minister Ashwini Vaishnaw confirmed that the Centre has finalised the commission’s composition, mandate and timelines.
Pay panel members
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 finalised.
The Centre constitutes Central Pay Commissions periodically (usually every 10 years). The pay panels are mandated 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 January 1, 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.
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.
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