Nearly 10 months after announcing the 8th Pay Commission, the government has finally approved the Terms of Reference (ToR) for the new pay panel. The ToR will serve as a blueprint for the panel, which will examine pay structures, allowances, and pension revisions for employees and retirees. The ToR will also set the boundaries and timeframe for the pay panel’s recommendations.
The 8th Central Pay Commission, which will be a temporary body working until the recommendations are implemented by the Centre, will now come out with a report after assessing various monetary and non-monetary benefits being provided to the serving employees and retirees. Based on past experiences, it can be said that the new pay panel might take about 18 months to submit its report to the government.
After the Cabinet meeting on Tuesday, Union minister Ashwini Vaishnaw confirmed that the Centre has finalised the commission’s composition, mandate and timelines.
Vaishnaw said the new pay panel will examine current salary slabs, allowances, grade pay structures, pension formulae and other financial components that shape the overall compensation for employees.
Pay panel members appointment
Justice Ranjana Prakash Desai will be the chairperson of the 8th Pay Commission. IIM Bangalore Professor Pulak Ghosh will be the member, and Ministry of Petroleum and Natural Gas Secretary Pankaj Jain will be the member-secretary.
It will make its recommendations within 18 months of the date of its constitution. It may consider, if necessary, sending interim reports on any of the matters as and when the recommendations are finalised.
The Centre constitutes Central Pay Commissions periodically (usually every 10 years). The pay panels are mandated to go into various issues of emoluments structure, retirement benefits and other service conditions of central government employees and to make recommendations on the changes required thereon.
Usually, the recommendations of the pay commissions are implemented after a gap of every ten years. Going by this trend, the effect of the 8th Central Pay Commission recommendations would normally be expected from January 1, 2026.
The government had announced formation of the 8th Central Pay Commission in January, 2025 to examine and recommend changes in the salaries and other benefits of central government employees.
Key factors before making recommendations
The 8th Pay Commission will consider the overall economic situation of the country and the importance of maintaining fiscal prudence, the government said. It will also focus on ensuring that sufficient funds remain available for developmental projects and welfare programmes that benefit the public, the release said.
8th Pay Commission impact on states and other sectors
The 8th pay panel will review the financial burden of unfunded pension schemes and assess how its recommendations might affect the finances of state governments. States often follow these decisions with some changes.
It will also compare the pay, benefits, and working conditions of Central government employees with those in public sector undertakings and the private sector.
Terms of Reference: What it means for central govt staff
Now the Commission will take at least 18 months to finalise it report and submit it to the government, which will finally decide on the applicability of the suggestions and the timeline of implementation. The recommendations will, however, be implemented retrospectively from January 1, 2026.