The 8th Central Pay Commission (CPC)
Syllabus: Economy (UPSC Prelims)
Source: The Hindu
Context
The Union Cabinet has approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), chaired by Justice Ranjana Prakash Desai (Retd.), to review pay, allowances, and pensions of Central Government employees.
About the 8th CPC
What it is:
The 8th Central Pay Commission is an expert body constituted by the Union Government to recommend revisions in the salary structure, allowances, and pension schemes for Central Government employees and pensioners.
Establishment:
- Announced in January 2025, formally constituted in October 2025 after Cabinet approval.
- Aims to ensure implementation from January 1, 2026.
Composition
- Chairperson: Justice Ranjana Prakash Desai (Retd.)
- Part-time Member: Prof. Pulak Ghosh, IIM Bangalore
- Member-Secretary: Pankaj Jain, Petroleum Secretary
- Tenure: To submit final recommendations within 18 months, with scope for interim reports.
Coverage
The 8th CPC covers:
- Central Government employees (civil and defence)
- Retired personnel
- All India Services
- Union Territories and certain autonomous bodies
Mandate and Functions
- Pay and Pension Revision: Review pay scales, allowances, and pensions to maintain equity and efficiency.
- Fiscal Prudence: Balance pay increases with macroeconomic stability and fiscal responsibility.
- Equity Across Sectors: Ensure fair comparison between public sector, PSUs, and private sector compensation.
- Impact on States: Assess how recommendations influence State finances and promote coordinated implementation.
- Pension Sustainability: Suggest reforms for long-term viability of pension obligations.
Significance
- Continues the 10-year pay revision cycle that began with the 1st CPC (1946).
- Aims to improve employee morale, productivity, and service delivery, while maintaining fiscal balance.
- Will shape future public sector wage policies and pension reforms in India.
