Update on the 8 Pay Commission: Prime Minister Narendra Modi’s Union Cabinet has accepted the Terms of Reference (ToR) for the 8th Central Pay Commission, which is a significant move for central government workers. The suggestions will affect the pay of around 69 lakh retirees and 50 lakh government employees.
In January 2025, the government announced the creation of the 8th Pay Commission to examine Central Government employees’ salaries, perks, and retirement plans.
Timeline and Composition of the Commission
The Cabinet decision states that the 8th Pay Commission would operate as a temporary body with:
- Chairperson: Ranjana Prakash Desai, a former justice of the Supreme Court
- Part-Time Professor Pulak Ghosh of IIM Bangalore is a member.
- Petroleum Secretary Pankaj Jain is the member-secretary.
Its report must be submitted within 18 months of its establishment, and interim suggestions may be submitted.
I&B Minister Ashwini Vaishnaw responded to a question on the implementation of updated wages by saying, “The precise date will be decided after the interim report comes in… However, January 1, 2026 should be the primary date.
What Will the Commission Examine?
The Joint Consultative Machinery (JCM) prepared and the Cabinet approved the ToR, which will direct suggestions and consider:
- India’s economic conditions and fiscal prudence
- Availability of funds for welfare and development
- Pension liabilities
- Impact on State finances
- Comparisons with PSU and private-sector pay
Typically, pay commissions are established every ten years. The recommendations of the 8th Pay Commission are anticipated to go into effect on January 1, 2026, following that cycle, just like the 7th Pay Commission did in 2016.Until the new pay structure is put into place, central government employees will continue to receive periodic Dearness Allowance (DA) modifications to balance inflation.
