New Delhi: The Union Cabinet on Tuesday approved the Terms of Reference (ToR) for the 8th Central Pay Commission, paving the way for a review of pay, allowances, and pension structures that will impact around 50 lakh central government employees and 69 lakh pensioners across the country. The recommendations are expected to take effect from January 1, 2026.
Announcing the decision, Information and Broadcasting Minister Ashwini Vaishnaw said, “The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today approved the Terms of Reference of the 8th Central Pay Commission.” The move comes ahead of the Bihar Assembly elections scheduled between November 6 and 11.
The commission will be chaired by former Supreme Court judge Justice Ranjana Prakash Desai, who currently heads the Press Council of India. She will be joined by Petroleum Secretary Pankaj Jain as the Member Secretary and Pulak Ghosh, professor at the Indian Institute of Management (Bangalore), as the part-time member. The panel is expected to submit its final report within 18 months, along with interim reports as and when they are finalised.
According to the official statement, the 8th Pay Commission will examine the existing structure of emoluments, benefits, and working conditions of central government employees. It will also study compensation patterns in Central Public Sector Undertakings and the private sector while framing its recommendations.
The terms specify that the commission will take into account prevailing economic conditions, fiscal prudence, and the requirement to maintain adequate resources for developmental and welfare programmes. It will also assess the financial implications of its recommendations on state governments, which generally follow the central pay structure with modifications.
The government noted that the ToR was finalised after consultations with various ministries, state governments, and representatives of the Joint Consultative Machinery, which represents employee interests. The Cabinet’s approval comes nearly nine months after the government gave its in-principle consent to constitute the panel.
Justice Desai’s appointment adds to her long list of post-retirement assignments, including chairing the Delimitation Commission for Jammu and Kashmir and leading the expert committee on drafting Uttarakhand’s Uniform Civil Code.
Vaishnaw said the implementation date would be confirmed after the interim report but added that it would “mostly be January 1, 2026”. Pay Commissions are typically constituted every ten years, and the 8th Commission’s timing aligns with that pattern. The 7th Central Pay Commission was set up in February 2014, and its recommendations were implemented from January 1, 2016.
Once the 8th Pay Commission’s recommendations are approved, the revised salaries and pensions will be implemented retrospectively from January 1, 2026. This means employees will receive arrears if the recommendations are finalised later, possibly by 2027 or early 2028.
To offset inflation, government employees currently receive Dearness Allowance (DA), revised every six months based on inflation data.
The Central Secretariat Service Forum (CSSF) had recently written to Prime Minister Modi urging early constitution of the 8th Pay Commission, noting that the 7th Commission was set up two years before its effective date. This, the forum said, had provided sufficient time for research and consultation.
The new commission’s report will not only determine the pay and pension structure of central employees but also serve as a benchmark for several state governments that typically follow suit.