What is the story about?
Prime Minister Narendra Modi-led Union Cabinet has recently approved the Terms of Reference of 8th Central Pay Commission (CPC). Moreover, the Government
has also formed and notified the new CPC. The recommendations made by the Commission will cover nearly 50 Lakh Central Government employees including Defence Services Personnel and almost 69 lakh Pensioners. In January 2025, the Central Government announced the formation of the 8th CPC to review and recommend revisions to the salaries and other benefits of Central Government employees. The 8th Central Pay Commission will function as a temporary body, consisting of a Chairperson, one Part-Time Member and a Member-Secretary, said Finance Ministry.
Is any announcement regarding 8th CPC expected in Budget?
The simple answer to this question is no. Pay Commissions are typically not announced or constituted in the budget. 8th Pay Commission is already being set-up. The next step will be the recommendations by members and chairperson of the new Pay Commission, after which the Central Government will go through it and implement it in due course, with the required modifications.Panel of 8th Pay Commission
Former Judge of the Supreme Court of India Justice Ranjana Prakash Desai has been appointed as the Chairperson of 8th CPC. Meanwhile, Pulak Ghosh, Professor, IIM Bangalore has been appointed Part-Time Member of the new Pay Commission. The Government has appointed Pankaj Jain, Secretary, Petroleum & Natural Gas Ministry as the Member-Secretary of the Pay Commission.Timeline of 8th CPC
In January 2025, the Central Government had announced formation of the 8th Central Pay Commission (8th CPC) to examine and recommend changes in Salaries and other benefits of Central Government employees. Now, the ToR is approved by the Central Government. The Government has said that the 8th Pay Commission will make its recommendations within 18 months.The 7th Pay Commission's recommendations were approved within 6 months, which came in effect from January 1, 2016. If we consider the same timeline, the 8th Pay Commission likely to be implemented around 24 months from now.
Arrears for Central Government employees
Employees and pensioners will be paid arrears for the period between the effective date and the actual implementation. For example, if the recommendations are implemented in May 2027, arrears will apply from January 2026 to April 2027. The arrears will reflect the difference between the existing and revised pay. For instance, if salary increases from Rs 60,000 to Rs 65,000, the monthly gap is Rs 5,000, amounting to Rs 75,000 over a 15-month delay.Current salary for Central Government employees
Currently, Central Government employees and pensioners are paid under the 7th Pay Commission. As of now, the minimum basic pay for central government employees is Rs 18,000, while pensioners receive a minimum basic pension of Rs 9,000. Meanwhile, the maximum basic salary under 7th Pay Commission is Rs 2,25,000, while apex positions like the Cabinet Secretary and others receive Rs 2,50,000 per month. Under 7 CPC, fitment was set at 2.57. Moreover, the DA/DR currently stands at 58 per cent.At a minimum basic salary of Rs 18,000, a 3 per cent DA hike will add Rs 540. This will take the total minimum salary under 7th Pay Commission to Rs 28,440 at 58 per cent DA. Similarly, a 3 per cent DR hike will raise the Rs 9,000 minimum basic pension by Rs 270, bringing the total minimum pension to Rs 14,220 at 58 per cent rate.
