8th Pay Commission Salary Hike: The central government has announced significant good news for government employees and pensioners. On October 28, 2025, the Union Cabinet, led by Prime Minister Narendra Modi, approved the Terms of Reference (TOR) for the 8th Pay Commission.
Union Minister Ashwini Vaishnav stated that the government consulted with several ministries, state governments, and employee associations before finalizing the commission’s terms of reference. The commission will be required to submit its recommendations within 18 months.
This paves the way for an increase in salaries, allowances, and pensions for millions of employees and pensioners. The government has clearly stated that these changes will be made in keeping with the country’s economic situation and financial needs. This means that employees will benefit, but there will also be no shortage of funds for the country’s development and welfare programs.
What factors will decide how much the salary and pension will increase?
The Commission will examine the country’s current economic situation. This means how much money the government has and how much spending space it has. Secondly, the need for funds for development projects and social welfare programs will also be considered. Third, some pension schemes involve neither the employee nor the company contributing money, but the government bears the entire cost.
The burden of these schemes will be assessed to avoid future financial difficulties. Fourth, most state governments implement the Central Pay Commission’s recommendations with minor modifications. Therefore, the Commission will also examine the states’ financial situation to establish uniform rules across the country.
Fifth, the Commission will compare the salaries and allowances of government employees with those of public sector units and private sector employees. This will ensure that government employees’ salaries remain market-relevant.
