8th Pay Commission: There’s good news for millions of employees and pensioners awaiting the 8th Pay Commission. PM Narendra Modi has approved the Terms of Reference (ToR) for the 8th Pay Commission. The 8th Pay Commission team will consist of a chairperson, one part-time member, and a member secretary. The commission will be required to submit its recommendations within 18 months from its inception.
The decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi. The commission’s recommendations are expected to improve the salaries and pensions of approximately 5 million central government employees and 6.9 million pensioners.
Union Minister Ashwini Vaishnav stated that the government held discussions with several ministries, state governments, and employee associations before finalizing the commission’s terms of reference. The commission will submit its recommendations within 18 months. The government approved the formation of the 8th Pay Commission in January 2025. Its purpose is to review the salary, allowances, and pension structure of central government employees. Under this, salaries will be updated according to current inflation and lifestyle costs.
Minister of State for Finance Pankaj Chaudhary had told the Parliament that the process of implementing the new salary structure will begin when the commission gives its recommendations and the government approves them. Typically, a Pay Commission is constituted once every 10 years. The last, the 7th Pay Commission, was formed in February 2014, and its recommendations were implemented from January 1, 2016. In the same vein, the recommendations of the 8th Pay Commission are expected to be implemented from January 1, 2026.
The government says the commission’s recommendations will improve employees’ salaries and pensions, as well as increase their purchasing power. Currently, the central government provides its employees with a dearness allowance (DA), which is revised every six months based on the inflation rate. Recently, the government increased the DA by 3 percent.
