The central government has finally approved the terms of reference (ToR) for the 8th Pay Commission, paving the way for the three-member committee headed by Justice Ranjana Desai to begin its work. The full details of the terms of reference are given in a notification issued by the Finance Ministry on November 3.
The ToR clarifies that the commission will not be limited to salary and pension revisions for government employees, but will also review various other financial benefits like allowances, bonuses, gratuities and performance-based incentives. Like previous commissions, this committee will also recommend comprehensive salary reforms and significant changes in benefits.
Structure of the 8th Pay Commission
The government has said in the notification that Justice Desai will be the Chairperson of the 8th Pay Commission. Professor Pulak Ghosh has been appointed as a part-time member and Pankaj Jain as the Member Secretary.
The Commission will be headquartered in New Delhi and will submit its recommendations to the government within 18 months. The Commission may also submit an interim report, if necessary.
The Commission will have its headquarters in New Delhi and will submit its recommendations to the government within 18 months. The Commission may also submit an interim report, if necessary.
Which employees will benefit?
- – Industrial and non-industrial employees of the Central Government
- -All-India Services Officers
- -Armed Forces personnel
- -Employees of Union Territories
- -Employees of the Indian Audit and Accounts Department
- -Members of regulatory bodies established by Parliament (except RBI)
- -Officers and employees of the Supreme Court and High Courts (within Union Territories)
- -Judicial officers within the Union Territories
Salary, allowances and other benefits:
The Commission will recommend necessary and practicable changes in salary, allowances and other benefits or allowances.
The Bonus and Performance-Based Incentive Scheme (PLI)
Commission will review existing bonus schemes and may recommend new performance-based incentive models to reward outstanding employees.
Restructuring of Allowances:
Considering the terms and number of various allowances currently provided, the Commission will review their rationality and may recommend restructuring.
Gratuity and Pension
Death-cum-Retirement Gratuity (DCRG) will be reviewed for employees covered under the National Pension System (NPS) and Unified Pension Scheme (UPS).
Apart from this, improvements in gratuity and pension will be recommended for employees not covered under NPS.
Considering the economic situation and impact on the states,
the 8th Pay Commission has been directed to consider the economic situation of the country, fiscal prudence and the fiscal position of the states while making its recommendations.
The Commission will also examine the salaries and benefits paid to employees of Central Government Public Sector Undertakings (PSUs) and private sector to provide comparative and practical recommendations.
Report to be submitted within 18 months
According to the notification, the commission will have to submit its report within 18 months. This means that if the commission starts work in November 2025, its recommendations are expected to reach the government by May 2027. It is also possible that the commission may issue interim reports on some issues, so that the employees can get initial relief soon.
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