Terms of Reference of 8th CPC Approved

• 29 Oct 2025

 Why in News? 

The Union Cabinet has approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), which is responsible for reviewing and recommending revisions in the pay structure and retirement benefits of central government employees and pensioners. 

Key Points 

• About: The formation of the 8^th CPC was first announced in January 2025, and its Terms of Reference were approved by the Cabinet on 28^th October 2025. 
  • The Commission will submit its recommendations within 18 months of its constitution, impacting around 50 lakh central government employees (including defence personnel) and 69 lakh pensioners. 
  • The revised pay and pension structures are expected to be implemented from January 2026, after the submission of the Commission’s report. 
• Composition of 8^th CPC: 

Position	Name / Designation
Chairperson	Justice Ranjana Prakash Desai (Former Supreme Court Judge)
Part-time Member	Professor Pulak Ghosh (Indian Institute of Management, Bangalore)
Member-Secretary	Pankaj Jain (Petroleum Secretary)

•  Terms of Reference (ToR): The 8^th CPC has been tasked with making recommendations after considering: 
  • Economic conditions of the country and the need for fiscal prudence. 
  • Availability of resources for developmental expenditure and welfare measures. 
  • The unfunded cost of non-contributory pension schemes (particularly the pre-2004 pension liabilities). 
  • The impact on state finances, as state governments often align their pay scales with the Centre. 
  • The current emolument structure, benefits, and working conditions of employees in central public sector undertakings (CPSUs) and the private sector. 
• Background: The Pay Commission is typically constituted once every 10 years to review and recommend changes in the salary structure, allowances, and pensions of government employees. 
  • The 7^th CPC was constituted in 2014, and its recommendations were implemented from 1^st January 2016.