Cabinet clears terms of reference for 8th Pay Commission: Check details

The Union Cabinet approved the terms of reference for the 8th Central Pay Commission and cleared new nutrient-based subsidy rates for fertilisers for the Rabi 2025-26 season

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved the terms of reference for the 8th Central Pay Commission (CPC).

 

The 8th Central Pay Commission will function as a temporary body comprising a chairperson, one part-time member and one member-secretary. The Commission has been asked to submit its recommendations within 18 months from the date of its formation. It may also choose to submit interim reports on specific issues as and when recommendations are finalised.

 

Key factors for recommendations

 

While framing its proposals, the Commission will take into account the following aspects:

• The overall economic conditions in the country and the need for fiscal prudence

 

• The importance of ensuring that sufficient funds remain available for development projects and welfare schemes

• The unfunded cost of non-contributory pension schemes

• The potential impact on state government finances, as most states tend to adopt the Central Pay Commission’s recommendations with modifications

• The current pay structure and benefits available to employees in central public sector undertakings and the private sector   

 

Background and timeline

 

The Central Pay Commissions are set up periodically to review and recommend revisions in emoluments, pensions and other service conditions of Central government employees. These commissions are typically formed once every 10 years and their recommendations take effect around that cycle.

 

Following this trend, the recommendations of the 8th Central Pay Commission are expected to come into force from January 1, 2026.

 

Cabinet approves new subsidy rates for fertilisers for Rabi

 

The Union Cabinet also approved the Department of Fertilisers’ proposal to fix nutrient based subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilisers for the Rabi season 2025-26. The new rates will apply from October 1, 2025, to March 31, 2026.

 

According to the government, the tentative budgetary requirement for the upcoming Rabi season will be around ₹37,952.29 crore. This is about ₹736 crore higher than the allocation for the Kharif season 2025.

 

Under the approved rates, subsidies on P&K fertilisers, including Di-Ammonium Phosphate (DAP) and NPKS grades (nitrogen, phosphorus, potash, sulphur), will continue. 

 

Key benefits for farmers

 

The Cabinet decision brings the following benefits:

• Affordable fertilisers: Farmers will continue to get fertilisers at subsidised and reasonable prices

• Balanced subsidy structure: The move will help rationalise subsidies in line with the recent changes in international prices of fertilisers and raw materials

 

The government currently makes 28 grades of P&K fertilisers, including DAP, available to farmers through manufacturers and importers at subsidised rates. The Nutrient Based Subsidy (NBS) Scheme, introduced on April 1, 2010, governs this subsidy system.