News: The Union Cabinet, chaired by the Prime Minister, approved the Terms of Reference of the 8th Central Pay Commission.
About Terms of Reference (TOR) of 8th Central Pay Commission
About 8th Central Pay Commission
- It was announced in January 2025.
- Structure: It will have a Chairperson, one Part-Time Member, and a Member-Secretary.
- Justice (Retd.) Ranjana Prakash Desai is serving as the Chairperson.
- Timeframe: It will submit its recommendations within 18 months of its constitution.
- Terms of Reference of 8th Central Pay Commission: While making the recommendations the Commission will keep in view the followings:
- The economic conditions in the country and the need for fiscal prudence;
- The need to ensure that adequate resources are available for developmental expenditure and welfare measures;
- The unfunded cost of non-contributory pension schemes;
- The likely impact of the recommendations on the finances of the State Governments which usually adopt the recommendations with some modifications; and
- The prevailing emolument structure, benefits and working conditions available to employees of Central Public Sector Undertakings and private sector.
About Terms of Reference (TOR) of A Central Pay Commission
- TOR is like a rule book for a pay commission, based on which the commission prepares its report.
- It has definitions, terms and conditions used as a reference for preparing a pay commission report.
- It will also set the boundaries and timeframe for the pay panel’s recommendations.
- Drafted by: A Joint Consultative Machinery (JCM) drafts Terms of Reference (TOR) of a pay commission.
- Joint Consultative Machinery (JCM)
- The JCM has employee union representatives from each ministry.
- Out of 60 JCM members, 12 are selected for the standing committee.
- These 12 members discuss TOR topics with secretary-level government employees.
- Once finalised, TOR goes to the Cabinet for approval.
- Approved by: The Cabinet Committee under the Finance Ministry approves it.
- If the Cabinet wants, it can decline some TORs or ask the members to modify them.
About Central Pay Commissions
- They are periodically constituted to examine emolument structures, retirement benefits, and other service conditions of Central Government employees and recommend necessary changes.
- Their recommendations are usually implemented every ten years.
- A pay commission has the power to discuss matters outside of TOR.
