 "Cabinet approves 8th Pay Commission, names Justice Desai chairperson")
The Union Cabinet, chaired by Prime Minister Narendra Modi on Wednesday, appointed Justice Ranjana Prakash Desai as the chairperson of the 8th Central Pay Commission (CPC) and approved its terms of reference (ToR).
Justice Desai is a former judge of the Supreme Court of India and is currently serving as the chairperson of the Press Council of India. Unlike earlier CPCs, which had two members, the 8th CPC will have one member (part time): Pulak Ghosh, a professor at the Indian Institute of Management, Bangalore. Petroleum and Natural Gas secretary Pankaj Jain has been appointed as the member secretary of the commission.
The government had earlier announced its intention to constitute the 8th CPC in January this year ahead of the Delhi elections. The CPC has been given 18 months’ time from the date of constitution to make its recommendations, which are likely to be implemented retrospectively from January 1, 2026. “The 8th Central Pay Commission will be a temporary body. It may consider, if necessary, sending interim reports on any of the matters as and when the recommendations are finalised,” the government said in a statement.
The CPCs are constituted once a decade to examine various aspects of emoluments structure, retirement benefits and other service conditions of Central government employees and to make recommendations on necessary revisions. “Usually, the recommendations of the pay commissions are implemented after a gap of every ten years. Going by this trend, the effect of the 8th Central Pay Commission recommendations would normally be expected from 1.1.2026,” the press statement said.
Once implemented, the Commission’s recommendations will benefit nearly 5 million Central government employees including Defence services personnel and nearly 6.9 million pensioners.
The adoption of the 7th CPC, constituted in 2014 and effective from January 1, 2016, had entailed an expenditure hike of ₹1 trillion in 2016-17 for the Centre.
The government said while making the recommendations, the 8th CPC will keep in view the economic conditions in the country and the need for fiscal prudence; the need to ensure that adequate resources are available for developmental expenditure and welfare measures; the unfunded cost of non-contributory pension schemes; the likely impact of the recommendations on the finances of the state governments which usually adopt the recommendations with some modifications; and the prevailing emolument structure, benefits and working conditions available to employees of Central Public Sector Undertakings and private sector.
The only new ToR for the CPC is to consider the “unfunded cost of non-contributory pension schemes”. The government, however, has omitted the ToR included in the 7th CPC that called for examining “the best global practices and their adaptability and relevance in Indian conditions”.
However, apart from the above generic issues, the government has not referred any specific matters for the Commission to examine, unlike the detailed ToRs given to earlier CPCs.
The government said the ToR has been finalised after consultations with various ministries, state governments and staff side of Joint Consultative Machinery.
In its submission, the staff side of Joint Consultative Mechanism had recommended inclusion in the ToR of 8th CPC issues such as devising methods to provide cashless medical benefits to employees and pensioners; re-examining and reinstating old pension scheme for post-2004 recruits; children education allowance and hostel subsidy up to post-graduation level; a hike in ‘standard consumption norm’ from 3 to 3.6 family consumption units. A consumption unit is a standardised measure used to compare the nutritional needs of individuals, typically based on a reference adult male doing moderate work. However, these issues did not find mention in the ToR released after the Cabinet meeting. To be sure, the government is not bound to accept such submissions by the central staff.