Cabinet Approves Terms of Reference for 8th Central Pay Commission

New Delhi, October 28, 2025 — The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), marking a crucial step toward revising pay structures and service conditions for Central Government employees.

According to the decision, the 8th CPC will function as a temporary body comprising a Chairperson, one Part-Time Member, and a Member-Secretary. The Commission has been tasked with submitting its recommendations within 18 months from the date of its constitution. It may also issue interim reports on specific subjects as deemed necessary during the review process.

While formulating its recommendations, the Commission will focus on key economic and administrative factors, including:

• The overall economic conditions and the need for fiscal prudence,

• Ensuring adequate resources for development and welfare initiatives,

• Assessing the financial implications of non-contributory pension schemes,

• Evaluating the impact on State finances, since states often adopt central recommendations, and

• Reviewing existing emoluments and benefits in Central Public Sector Undertakings and private organizations.

The Central Pay Commissions are periodically established to review salary structures, retirement benefits, and service conditions of Central Government employees. Traditionally, a new commission is formed every ten years, with its recommendations taking effect from the start of the following decade.

In line with this trend, the 8th CPC’s recommendations are expected to come into force from January 1, 2026. The Government had earlier announced the formation of the Commission in January 2025 to comprehensively examine pay, allowances, and related benefits for Central Government personnel.

The move is seen as a continuation of the Government’s commitment to maintaining equitable compensation, fiscal discipline, and administrative efficiency within the public sector.