The Union Cabinet has officially approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), moving the process one step closer to revising salaries and benefits for Central Government employees. The meeting was chaired by Prime Minister Narendra Modi, and the announcement was made on October 28, 2025.
What the 8th Pay Commission Will Do
The 8th CPC will be a temporary body with a Chairperson, one part-time member, and a Member-Secretary. It has been given 18 months from the date of its formation to submit its full report, though it may send interim recommendations whenever required.
While preparing its report, the Commission will focus on:
- The country’s economic conditions and the need to maintain fiscal discipline.
- Ensuring sufficient funds for development and welfare programs.
- Addressing the rising burden of non-contributory pension schemes.
- Understanding how its recommendations might impact State Government finances, since most states follow CPC decisions with some tweaks.
- Reviewing pay structure, benefits, and working conditions in Central PSUs and the private sector to maintain competitiveness.
Why This Matters
Central Pay Commissions are set up roughly once every decade to revisit salaries, pensions, and service conditions of Central Government employees. With the 7th CPC implemented in 2016, the new recommendations are expected to take effect from January 1, 2026, following the usual 10-year cycle.
The Government had already announced the constitution of the 8th CPC in January 2025. With the ToR now approved, the Commission can begin its detailed review and prepare proposals for the next major salary revision for central employees.
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