8th Pay Commission update: The Union Cabinet, chaired by Prime Minister Narendra Modi, on 28 October, has approved the Terms of Reference (ToR) of the 8th Central Pay Commission, an official release said.
In January 2025, Union Minister Ashwini Vaishnaw announced that the Centre had approved the implementation of the 8th Pay Commission. This panel is set to revise the allowances, pensions and salaries of present and retired central government employees in line with inflation.
But since any future development was dependent on the ToR, which is a framework that defines the scope of a pay commission and specifies the areas in which it must offer recommendations, the commission lacks official recognition and is unable to initiate its functions.
Commission to consider these aspects:
While making the recommendations the Commission will keep in view the followings:
What is the 8th Pay Commission?
The Government announced the formation of the 8th Pay Commission in January 2025 to examine and recommend changes in the Salaries and other benefits of central government employees. Its recommendations are expected from 1 January 2026.
The Central Pay Commissions are constituted every 10 years to examine various issues of emoluments structure, retirement benefits, and other service conditions of Central Government employees and make recommendations on the changes required thereon.
Salary structure of central government employees
The salary of a government employee consists of basic pay, dearness allowance (DA), house rent allowance (HRA) and transport allowance.
- The basic salary of employees constitutes 51.5% of their total income,
- DA accounts for approximately 30.9%,
- HRA accounts for about 15.4%, and
- Travel allowance accounts for around 2.2%, according to a report by Ambit Institutional Equities.
The 8th Pay Commission is expected to benefit over a crore of central government employees and retirees — nearly 50 lakh central government employees, including defence personnel; and close to 65 lakh central government pensioners, including defence retirees.
