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8th Pay Commission news: In a big cheer for central government employees, PM Narendra Modi-led Union Cabinet on Tuesday approved the Terms of Reference for the 8th Central Pay Commission.The 8th Central Pay Commission’s proposals will impact the salaries of approximately 50 lakh central government staff members and 69 lakh retired personnel.In January 2025, the Government announced the formation of the 8th Central Pay Commission to review and propose revisions to the salaries and benefits of Central Government employees.
8th Pay Commission : Top things to know about Cabinet decision
According to the Cabinet release, the 8th Central Pay Commission Commission will function as a temporary entity, consisting of a Chairperson, one Part-Time Member, and one Member-Secretary. Its recommendations are due within 18 months of its establishment, with the possibility of submitting interim reports when specific recommendations are finalised. The 8th Pay Commission, led by former Supreme Court justice Ranjana Prakash Desai, will deliver a preliminary report to the government.Professor Pulak Ghosh from IIM Bangalore has been appointed as a part-time commissioner, whilst Petroleum Secretary Pankaj Jain will serve as the Member Secretary.When questioned about the implementation timing of the 8th Pay Commission’s recommendations, I&B Minister Ashwini Vaishnaw said, “The specific date will be decided once the interim report comes in… But, mostly it should be January 1, 2026.”The 8th Central Pay Commission’s deliberations will consider:i. The economic conditions in the country and the need for fiscal prudence;ii. The need to ensure that adequate resources are available for developmental expenditure and welfare measures;iii. The unfunded cost of non-contributory pension schemes;iv. The likely impact of the recommendations on the finances of the State Governments which usually adopt the recommendations with some modifications; andv. The prevailing emolument structure, benefits and working conditions available to employees of Central Public Sector Undertakings and private sector.Terms of Reference (TOR) serves as a framework document for a pay commission, establishing guidelines and parameters for preparing its report. It includes essential definitions, terms and conditions that guide the commission’s work.The Terms of Reference is drafted by a Joint Consultative Machinery (JCM), with final approval from the Cabinet Committee under the Finance Ministry. The JCM includes union representatives from various ministries. From its 60 members, 12 are chosen for the standing committee. These selected members engage in discussions about TOR subjects with secretary-level government officials. The finalised TOR is then submitted for Cabinet approval.The significance of TOR lies in its function as a main reference document when a pay commission develops its recommendations.Central Pay Commissions are established periodically to assess and recommend changes to emoluments, retirement benefits and service conditions for Central Government employees.These recommendations are typically implemented on a ten-year cycle. Following this pattern, the 8th Central Pay Commission’s recommendations would take effect from January 1, 2026.The 7th Pay Commission was established in February 2014, with its proposals taking effect from January 1, 2016.Central government staff receive dearness allowance (DA) to offset inflation’s impact on their actual salary value. This DA rate undergoes regular revision every six months, with adjustments linked to inflation levels.
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