The government has officially approved the formation of the 8th Central Pay Commission (8th CPC). This commission will review and suggest changes to the salaries, allowances, and pension benefits of central government employees and pensioners. This is important news for millions of government workers across the country.

Union Minister Ashwini Vaishnaw announced that the Terms of Reference (ToR) for the Pay Commission have been finalized. These terms were prepared after discussions with central ministries, state governments, and employee representatives. The commission will study the current pay system and send its recommendations to the government within 18 months. If any part of the study is completed earlier, the commission may give interim or early recommendations.

Who will be covered under the 8th Pay Commission?

Nearly 50 lakh serving central government employees and around 69 lakh pensioners will be covered under this commission’s review. Once the recommendations are approved and implemented, government employees could see improvements in their salary structure, allowances, and retirement perks.

There have been discussions that the Pay Commission may consider a fitment factor of around 1.8 times the current basic pay, although the government has not confirmed any specific details yet.

The commission will be led by Justice Ranjana Prakash Desai, a former Supreme Court Judge. Pulak Ghosh, a professor from IIM Bangalore, will serve as a part-time member, and Pankaj Jain, the current Petroleum Secretary, will be the Member-Secretary.

What the commission will consider

While preparing the recommendations, the commission will study several important factors such as:

1.The country’s current economic situation

2. The government’s financial capacity

3. Funds needed for development and welfare work

4. Pension liabilities of the government

5. Salary comparison with the private sector and public enterprises

6. Impact on state government finances if they adopt the same pay structure

The Union Cabinet had given approval to form the commission in January 2025. Now that the ToR is ready, the work begins formally. Usually, a Pay Commission is set up once every 10 years. The last, or 7th Pay Commission, submitted its report in 2015 and its recommendations took effect from January 1, 2016.

The 8th Pay Commission is expected to complete its review by mid-2027. After that, the central government will examine the report and decide when and how to implement the changes. This development brings hope of better pay and improved financial security for central government employees and pensioners across India.