In a move that will directly impact lakhs of Central Government employees and pensioners, the Union Cabinet, chaired by Prime Minister Narendra Modi, has cleared the Terms of Reference (ToR) for the 8th Central Pay Commission. This long-awaited approval sets the ball rolling for the next big salary revision, as the commission has now been officially empowered to start work and submit its report within 18 months of being constituted.

Pay Commission Gets Green Light to Begin Work

The 8th Pay Commission will be a temporary body, comprising a Chairperson, one part-time Member, and a Member-Secretary. It can also submit interim reports on key matters before presenting its final recommendations.

Officials said the ToR approval was crucial, as it defines the scope and direction of the panel's work. Without it, the commission couldn't formally begin operations.

What the 8th Pay Commission Will Focus On

The new commission has been tasked with reviewing and recommending changes to the salaries, pensions, and allowances of Central Government employees, in line with the country's economic realities.

While drafting its recommendations, the panel will weigh several factors - including India's fiscal health, the need for development spending, the impact on state finances, and comparisons with pay structures in public sector undertakings and private companies.

The ToR also allows the commission to send interim reports if it identifies urgent areas that need early attention.

'Every 10 Years, A Big Change'

Central Pay Commissions are typically formed once every decade to ensure government pay scales stay in tune with inflation and living costs. The 8th Pay Commission's recommendations are expected to take effect from January 1, 2026, following the same pattern as previous commissions.

Union Minister Ashwini Vaishnaw had first announced the formation of the 8th Pay Commission in January 2025, but its functioning was on hold until the Cabinet approved the ToR - which has now been done.

What This Means for Government Employees

With the approval now in place, the panel can begin detailed studies and consultations. Its report will shape not only how much Central Government employees earn but also influence state pay structures, as many states adopt similar models with slight modifications.

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