Good news for govt employees! Union Cabinet approves terms of reference of 8th Pay Commission

The union cabinet on Tuesday approved the Terms of Reference of the 8th Pay Commission, which will revise the salaries of nearly 50 lakh employees of the central government. Former Supreme Court judge Ranjana Prakash Desai will head the Commission as chairperson. The panel will submit its recommendations within 18 months and it is likely to come into effect from January 1, 2026, Information and Broadcasting Minister Ashwini Vaishnaw said at a cabinet briefing on Tuesday.

According to an official release, the 8th Central Pay Commission will function as a temporary body comprising chairperson, one part-time Member, and one member-secretary. While formulating its recommendations, the panel will take into consideration the prevailing economic conditions in the country and the need for fiscal prudence, the release said. It will also assess the requirement to ensure sufficient resources for developmental expenditure and welfare measures, the unfunded cost of non-contributory pension schemes, and the likely financial implications for state governments, which typically adopt similar recommendations with modifications. In addition, the Commission will examine the existing pay structure, benefits, and working conditions of employees in Central Public Sector Undertakings (PSUs) and the private sector.

Central Pay Commissions are periodically constituted to examine issues related to emoluments, retirement benefits, and service conditions of central government employees and to recommend necessary changes. Usually, the recommendations of the Pay Commissions are implemented after a gap of every ten years. The 7th Pay Commission's recommendations were implemented on January 1, 2016, though the union cabinet approved its implementation on June 29 of that year. The government had announced the formation of the 8th Central Pay Commission in January this year to review and recommend revisions in the salaries and benefits of central government employees, continuing the established process of periodic review and reform in public sector compensation.

Union Minister Vaishnaw said on Tuesday: "This is a very significant decision. In January itself, in-principle approval was given for the formation of the 8th Pay Commission, and within such a short time, the 8th Central Pay Commission has also been constituted."

(With inputs from news agency ANI).