Cabinet approves ToR of 8th pay panel for 50 lakh employees, 69 lakh pensioners

The Union cabinet on Tuesday approved the terms of reference (ToR) for the 8th Central Pay Commission, paving the way for a fresh review of pay, pensions and service conditions for nearly 50 lakh Central government employees and 69 lakh pensioners. The decision is expected to have wide financial implications, including for state governments that usually adopt Central pay revisions with modifications.

The new pay panel will be headed by former Supreme Court judge Ranjana Prakash Desai, who currently chairs the Press Council of India. Its recommendations are expected to take effect from 1 January 2026, in keeping with the 10-year cycle followed since the Sixth Pay Commission.

Information and broadcasting minister Ashwini Vaishnaw announced the cabinet’s approval after the meeting, chaired by Prime Minister Narendra Modi, saying the ToR had been finalised after consultations with Central ministries, state governments and representatives of employees through the Joint Consultative Machinery.

According to the official statement, the commission will review the prevailing emolument structure, benefits and working conditions of Central government employees and will also take into account remuneration patterns in Central Public Sector Undertakings and the private sector while framing its recommendations.

The panel will further assess the economic conditions of the country, the need for fiscal prudence, and the importance of ensuring that sufficient resources remain available for developmental and welfare expenditure. It will also consider the unfunded liabilities of non-contributory pension schemes and the financial impact of its proposals on state governments.

The 8th Pay Commission has been given 18 months to submit its final report, though it may present interim reports as and when specific recommendations are finalised.

Alongside Justice Desai, the commission will include Professor Pulak Ghosh of the Indian Institute of Management, Bengaluru, as a part-time member, and Petroleum Secretary Pankaj Jain as the Member-Secretary.

Justice Desai, who retired from the Supreme Court in 2014, has led several major government panels, including the Delimitation Commission for Jammu and Kashmir and the expert committee on the Uniform Civil Code (UCC) for Uttarakhand. The new pay panel marks her fourth major assignment since retirement.

On the question of when the new pay scales will come into force, Vaishnaw said the specific date would be determined once the interim report is submitted, but added that “mostly it should be 1 January 2026”.

The Cabinet’s decision comes just days before the Bihar Assembly elections, scheduled between 6 and 11 November, and is expected to have political resonance among government employees and pensioners across the country.

The move follows the government’s in-principle approval, granted about nine months ago, to set up the new commission. Traditionally, each pay commission’s recommendations are implemented roughly every decade: the 7th Pay Commission, constituted in February 2014, took effect from 1 January 2016.

Meanwhile, to offset the impact of inflation until the new pay scales are implemented, central government employees will continue to receive dearness allowance (DA), which is revised twice a year based on movements in the cost of living index.

With PTI inputs