Cabinet approves roadmap for 8th Central Pay Commission; recommendations expected by 2026

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC): the body responsible for reviewing the pay structure, pensions, and service conditions of Central government employees.

According to the official notification, the 8th CPC will be a temporary body comprising one Chairperson, one Part-Time Member, and one Member-Secretary. The Commission has been directed to submit its recommendations within 18 months from the date of its constitution, with the option to provide interim reports if necessary.

Key focus areas of the 8th Pay Commission

While framing its recommendations, the Commission will consider:

• The economic conditions of the country and the need for fiscal prudence.

• Ensuring adequate resources for development expenditure and welfare programmes.

• The unfunded cost of non-contributory pension schemes.

• The financial impact on State Governments, which generally adopt similar pay revisions.

• The existing pay structure and benefits in Central Public Sector Undertakings and the private sector.

Background and timeline

The Central Pay Commissions are typically set up every decade to review pay scales and related benefits for government employees and pensioners. Their recommendations usually come into effect once every ten years.

Going by that pattern, the 8th CPC’s recommendations are expected to take effect from January 1, 2026.

The government had first announced plans to constitute the Commission in January 2025 to review salaries, pensions, and allowances of Central government employees in light of evolving economic and administrative needs.