8th Pay Commission Latest Update 2025

The Union Cabinet has approved the Terms of Reference (ToR) for the 8th Central Pay Commission, marking a key milestone for over 50 lakh central government employees and 69 lakh pensioners . Expected to take effect from January 1, 2026, the commission aims to revise salaries, pensions, and service conditions amid economic considerations . This update addresses ongoing demands amid rising Dearness Allowance (DA) projected at 70% by 2026 .

The government announced the 8th Pay Commission in January 2025, following the standard 10-year cycle after the 7th CPC implemented in 2016 . The ToR approval by the Cabinet chaired by Prime Minister Narendra Modi establishes it as a temporary body to deliver recommendations within 18 months . Interim reports may precede the final submission, with implementation likely delayed until 2027-2028 post-review .

Central Pay Commissions periodically overhaul emoluments to align with inflation and fiscal prudence . The 8th CPC continues this tradition, considering state finances and public sector comparisons .

Structure includes a Chairperson, one part-time member, and a Member-Secretary . Reports indicate former Supreme Court Justice Ranjana Prakash Desai as Chairperson, IIM Bangalore's Prof. Pulak Ghosh as part-time member, and Petroleum Secretary Pankaj Jain as Member-Secretary . Full notification via Gazette is anticipated soon .

The ToR mandates review of pay, pensions, allowances, and working conditions while factoring economic conditions, developmental needs, pension costs, state impacts, and private sector benchmarks . Unions raise concerns over potential pensioner exclusions, prompting Parliament questions on December 1-2, 2025 . Government assures pension revisions; DA merger with basic pay is a key demand .

Fitment factor speculations range from 2.28 to 3.0, potentially hiking minimum basic pay from ₹18,000 to ₹41,000-₹51,000 . DA merger expected, resetting to zero post-revision . Pensions may see minimum rise from ₹9,000 to ₹20,500-₹25,740 .

Higher pay levels could see proportional increases, addressing stagnation issues . Allowances like HRA, TA recalculated; NPS/UPS revisions demanded .

Employee federations seek DA merger (crossed 50%), OPS restoration, vacancy fillings, and ToR amendments for inclusive pensions . Protests threatened if unmet; Finance Minister to respond in Parliament . Centre assures pensioner interests protected .

Stay tuned for Gazette notification and member appointments as the 7th CPC term ends December 31, 2025 . These revisions promise financial relief amid inflation .