Modi cabinet greenlights 8th pay commission, paving way for salary hikes and pension revisions

New Delhi (The Uttam Hindu) : The central government on Monday formally announced the formation of the 8th Central Pay Commission. The commission's Terms of Reference (ToR) have also been approved. The commission will be chaired by former Supreme Court Justice Ranjan Prakash Desai.

The commission will be required to submit its recommendations to the government within 18 months, Information and Broadcasting Minister Ashwini Vaishnav said after the cabinet meeting. The central government aims to implement the commission's recommendations by January 1, 2026, benefiting millions of central government employees and pensioners.

What will the Commission consider?

The Pay Commission will consider the following five factors in making its recommendations:

1. The country's economic situation and the need for fiscal discipline.

2. Ensuring adequate resources are available for development work and welfare schemes.

3. Consideration of the cost of non-contribution-based pension schemes.

4. The financial impact on state governments, as they also typically adopt central government recommendations.

5. Comparison of salaries, allowances, and working conditions of central public sector (PSU) and private sector employees.

When was the formation announced?

Let us tell you that Central Pay Commissions are constituted from time to time to review the salaries, pensions and service conditions of central government employees and recommend necessary changes in them. Usually, a new Pay Commission is constituted every 10 years. In this sequence, the recommendations of the 8th Pay Commission are likely to be implemented from January 1, 2026. The government had announced the formation of the 8th Central Pay Commission in January 2025 to review the salaries, allowances and other facilities of central government employees.