Cabinet Clears 8th Pay Commission Terms, Report in 18 Months

The Union Cabinet, chaired by Prime Minister Narendra Modi, has officially approved the Terms of Reference for the 8th Central Pay Commission (CPC), setting in motion a process that will impact the pay structure of more than 11 million central government employees and pensioners across India.

The newly constituted panel is expected to submit its recommendations within 18 months from the date of its formation.

Composition and Mandate of the 8th Pay Commission

The 8th Pay Commission will function as a temporary body comprising a Chairperson, one part-time Member, and a Member-Secretary.

According to reports, former Supreme Court judge Ranjana Prakash Desai has been named as the Chairperson of the panel.

The Commission’s primary mandate is to review and recommend changes to the salary, allowances, and pension structure for central government employees, taking into account inflation, economic conditions, and evolving workforce needs.

The Terms of Reference approved by the Cabinet outline the scope of the Commission’s work, which includes evaluating existing pay scales, suggesting revisions, and ensuring parity across various government departments and services.

The panel is also expected to consider performance-linked pay models and rationalization of allowances.

Timeline and Implementation Outlook

The Commission will begin its work in early November 2025, with a final report due by mid-2027.

The government could begin implementing the recommendations as early as January 2026. It may continue the rollout in phases through 2028.

The Department of Personnel and Training (DoPT) initiated discussions on the Terms of Reference in January 2025, and the formal establishment of the Commission followed in Februaryartyz.in.

This timeline aligns with previous pay commission cycles, which typically span 18 to 24 months from formation to implementation.

The government constituted the 7th Pay Commission in 2013 and implemented its recommendations in 2016.

Expected Benefits and Fitment Factor

Initial reports suggest that the 8th Pay Commission may propose a fitment factor between 2.28 and 2.46.

This could lead to a 30–34% increase in basic pay for eligible employees.

The government aims to address inflationary pressures and improve the financial well-being of staff and retirees through this adjustment.

The Commission will recommend changes to pension schemes, including potential enhancements to minimum pension levels and adjustments to dearness relief.

These revisions will be critical for retired personnel who rely on fixed incomes.

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