The central government has approved the Terms of Reference (ToR) for the 8th Central Pay Commission, completing the formal process for its formation.
Former Supreme Court judge Justice Ranjan Prakash Desai has been appointed as the commission’s chairperson.
Information and Broadcasting Minister Ashwini Vaishnaw announced after the Cabinet meeting that the commission must submit its recommendations within 18 months.
The government plans to implement these recommendations from January 1, 2026.
What is a Terms of Reference (ToR)?
A Terms of Reference (ToR) outlines the guidelines and scope given by the government to a commission, committee, or institution.
In simple terms, the ToR defines what issues the commission will study, how long it has to complete its work, and which factors it must consider before submitting its report.
Key Points the Commission Will Consider
While preparing its recommendations, the 8th Pay Commission will focus on the following five key factors:
The economic condition of the country and the importance of maintaining financial discipline.
Ensuring adequate resources are available for development projects and welfare schemes.
Considering the cost of non-contributory pension schemes.
Assessing the financial impact on state governments, as they often follow the Centre’s pay revisions.
Comparing salaries, allowances, and working conditions of employees in the Central Public Sector (PSUs) and the private sector.
Formation and Implementation Timeline
The Central Pay Commissions are set up every 10 years to review the salaries, pensions, and service conditions of central government employees and suggest necessary revisions.
The 8th Central Pay Commission was officially announced in January 2025, and its recommendations are expected to take effect from January 1, 2026.
