In a significant development for millions of government employees, the Union Cabinet has officially given its nod to the Terms of Reference for the 8th Central Pay Commission (CPC). This pivotal body is now fully empowered to deliberate and shape the future salary structure and retirement benefits for central government personnel, as announced on Tuesday, October 28, 2025.
The government had previously signaled its intent to establish the 8th CPC in January 2025, with a clear mandate to meticulously review and propose modifications to the compensation and other benefits enjoyed by its vast workforce.
The newly formed Commission will consist of a chairperson, a part-time member, and a member-secretary. Their comprehensive recommendations are expected to be presented within 18 months from the date the Commission is officially constituted.
During its deliberations, the 8th CPC is mandated to consider a range of critical factors. These include the prevailing economic climate of the nation, the imperative for responsible financial management, and the necessity of allocating sufficient resources for both developmental projects and social welfare initiatives.
Furthermore, the Commission will thoroughly examine the financial implications of non-contributory pension schemes, assess how its proposals might affect state finances, and analyze the current pay scales, perks, and working conditions of employees in both central public sector undertakings and the private sector.
Should the Commission deem it appropriate or necessary, it retains the flexibility to submit interim reports on any specific issues under its examination, as soon as those recommendations are finalized.