8th CPC Explained: Scope, Timeline and What Happens Now

The Union Cabinet’s approval of the Terms of Reference (ToR) for the 8th Central Pay Commission (8th CPC) has officially set in motion India’s next major pay revision exercise for Central Government employees and pensioners. While the initial announcement made headlines, the focus now shifts to what happens next — the composition of the Commission, its scope, and how soon its recommendations could translate into benefits for millions of employees.

Cabinet Clears the Way for the 8th CPC

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the ToR on 28 October 2025, giving the 8th Pay Commission the mandate to begin its work. The approval defines the framework for reviewing pay, allowances, and pensions of central government employees — a process carried out roughly once every decade.

According to the Press Information Bureau (PIB), the 8th CPC will study and recommend a revised structure of pay and pensions for both civilian and defence personnel. Its recommendations are expected to take effect from 1 January 2026, maintaining the ten-year cycle followed by previous commissions.

What the Terms of Reference Cover

The ToR lays down the objectives, structure, and guiding principles for the Commission’s work.

As per the government notification:

The Commission will have a Chairperson, one part-time Member, and one Member-Secretary.
It must submit its report within 18 months of its constitution and may submit interim reports on specific issues if required.
While preparing recommendations, the Commission must consider:
- The country’s economic condition and need for fiscal prudence.
- The impact on State finances, as many states revise their pay scales in line with the Centre.
- The financial sustainability of pension obligations, especially non-contributory schemes.
- Comparative emoluments and working conditions in the public and private sectors.

These provisions aim to strike a balance between fair remuneration for employees and maintaining fiscal responsibility.

Who Will Head the Commission?

As of now, the government has not officially announced the Chairperson or members of the 8th CPC. The Department of Expenditure has begun the process of staffing around 40 key posts for the Commission’s secretariat.

However, several media outlets have speculated on likely names for the top positions:

Justice Ranjana Prakash Desai, former Judge of the Supreme Court, has been widely reported as a potential Chairperson.
Prof. Pulak Ghosh of the Indian Institute of Management, Bangalore, has been mentioned as a possible part-time Member.
Pankaj Jain, Secretary, Ministry of Petroleum & Natural Gas, has appeared in some reports as a likely Member-Secretary.

It is important to note that these names remain unconfirmed. Until an official gazette notification is issued by the government, the composition of the 8th CPC should be treated as unofficial and subject to change.

A Task with Massive Impact

The 8th Pay Commission’s work will affect more than 5 million serving employees and nearly 7 million pensioners across India.

Previous commissions — from the 6th to the 7th — brought landmark changes such as the Pay Matrix system and rationalisation of allowances. The 8th CPC is expected to continue that evolution, focusing on simplification and sustainability.

Given the scale of impact, the financial outlay is expected to be substantial, running into several lakh crore rupees once implemented. This is one reason why the Commission’s recommendations are carefully phased and fiscally calibrated.

The Road Ahead

With the ToR cleared, the immediate next steps include:

Appointment of Chairperson and members, officially constituting the 8th CPC.
Establishment of the Commission’s office and support staff.
Collection of data and feedback from central ministries, defence services, staff associations, and pensioner bodies.
Consultations with State Governments and public sector undertakings to maintain parity.

Once formed, the Commission will analyse data on pay progression, cost-of-living indices, inflation trends, and fiscal health before finalising its report.

The ToR gives the Commission 18 months to complete its work. If the panel is constituted soon, the final report could be ready by mid-2027, followed by the government’s review and implementation process.

Why It Matters

For employees, a pay commission is not merely about a raise — it often brings structural reforms, improved career progression, and rationalised allowances.

For pensioners, it determines family pension revisions, commutation factors, and Dearness Relief adjustments.

The 8th CPC is also expected to review how Dearness Allowance (DA) merges into basic pay once the new pay structure takes effect, resetting the DA cycle afresh.

At the same time, the government faces the challenge of maintaining fiscal discipline while ensuring fair compensation — a balance that each Pay Commission must navigate carefully.

Looking Forward

The approval of the Terms of Reference is the first concrete step in the 8th Pay Commission process. The coming months will reveal how swiftly the Commission is formed and begins its work.

For now, central government employees and pensioners should watch for: