Cabinet meet: 8th Pay Commission wait gets longer, no update on notification, Terms of Reference

However, there was no word on the 8th CPC ToR notification and appointment of members.

The Union Cabinet had decided to set up the 8th Pay Commission way back in January 2025. However, the ToR notification and the appointment of members to put the 8th CPC into motion are still pending.

The terms of reference would serve as a framework under which the 8th Pay Commission will review pay-related issues of employees and pensioners and recommend changes.

The 8th CPC is expected to review the existing salaries and pensions of employees and pensioners and recommend necessary changes. However, the pay panel can be formally set up only after its terms are set.

After being set up, the commission may take another 12-18 months to submit its report. This means if the commission is set up now, it may be able to finish its work by early 2027. After that, the Government may take a few more months to implement the recommendations.

However, even if the 8th CPC is delayed, employees and pensioners are likely to be eligible for arrears effective from January 1, 2026.

DA hike announcement

Ahead of Dussehra, the Union Cabinet on October 1 approved the release of an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners with effect from July 1, 2025, representing an increase of 3% over the existing rate of 55% of the Basic Pay/Pension, to compensate against the price rise.

The combined impact on the exchequer on account of an increase in both DA and DR would be ₹10,083.96 crore per annum. However, the DA/DR hike would benefit about 49.19 lakh Central Government employees and 68.72 lakh pensioners.