New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the formation of the 8th Central Pay Commission (CPC) and appointed Justice Ranjana Prakash Desai, former Supreme Court judge and current chairperson of the Press Council of India, as its head.
Unlike previous commissions, which had two full-time members, the 8th CPC will feature one part-time member, Pulak Ghosh, a professor at the Indian Institute of Management, Bangalore, while Petroleum and Natural Gas Secretary Pankaj Jain will serve as the member secretary.
The government has granted the commission 18 months to submit its recommendations, which are expected to be implemented retrospectively from January 1, 2026. The 8th CPC will examine pay structures, pensions, and service conditions of Central government employees and pensioners — a move set to impact nearly 5 million employees and 6.9 million pensioners across the country.
According to the government statement, “The 8th Central Pay Commission will be a temporary body and may, if necessary, submit interim reports as and when recommendations are finalized.”
The 7th Pay Commission, constituted in 2014, came into effect from January 1, 2016, leading to an additional expenditure of nearly ₹1 trillion for the Centre in 2016–17.
Focus on fiscal prudence
The 8th CPC’s Terms of Reference (ToR) include assessing the prevailing economic conditions, ensuring fiscal prudence, and evaluating the unfunded cost of non-contributory pension schemes. It will also study the likely impact on state government finances and maintain parity with Central PSUs and private sector pay structures.
Unlike the 7th CPC, the latest ToR drops the clause on examining “global best practices”, signaling a more India-focused approach.
Staff demands left out
Employee representatives from the Joint Consultative Machinery had suggested adding issues like cashless medical benefits, restoration of the old pension scheme for post-2004 recruits, and education allowance extension up to postgraduate level. However, these proposals were not included in the final ToR.
The government clarified that while staff inputs were considered, it is not bound to accept their suggestions. The ToR was finalized after consultations with various ministries, state governments, and employee bodies.
Once implemented, the 8th CPC’s recommendations are expected to have wide-ranging fiscal implications while potentially boosting disposable income for millions of Central government employees and pensioners.