The Centre's pay hikes demand deep analysis

The government’ terms of reference for India’s 8th Pay Commission begin with a reminder of fiscal prudence. The panel should put various aspects of public employment to close scrutiny

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On 28 October, the Union cabinet finalized the terms of reference (ToR) for the 8th Pay Commission, which has been tasked with submitting its report in 18 months.

Its recommendations, if accepted, will be effective from 1 January 2026. Such panels are set up once every 10 years to examine pay scales, retirement benefits and other service conditions for employees of the central government. What they recommend is usually adopted—with a few tweaks—by various state administrations for their own employees. It also has a ripple effect on the salaries of defence personnel and others on public payrolls, like school teachers, college professors and medical staff. It affects pensioners too.