Cabinet approves Terms of Reference for 8th Pay Commission

The Union Cabinet, chaired by Prime Minister Narendra Modi on Tuesday approved the Terms of Reference (ToR) of the 8th Pay Commission, which is likely to be implemented from January 1, 2026. The pay panel, to be chaired by former Supreme Court judge Ranjana Prakash Desai, will make recommendations within 18 months of the date of its constitution and submit an interim report to the government, according to an official press release. The recommendations of the pay panel will benefit about 50 lakh central government employees and 69 lakh pensioners. The commission will comprise one chairperson, one member (part time) and one member-secretary. Speaking on the date of implementation of the pay panel award, I&B Minister Ashwini Vaishnaw said, The specific date will be decided once the interim report comes in...But, mostly it should be January 1, 2026. The Cabinet had in January 2025, accorded an in-principle approval for setting up of the 8th Pay Commission. IIM (Bangalore) Professor Pulak Ghosh has been named as the part-time member, while Petroleum Secretary Pankaj Jain will be the Member Secretary. The panel will make recommendations based on: i. The economic conditions in the country and the need for fiscal prudence; ii. The need to ensure that adequate resources are available for developmental expenditure and welfare measures; iii. The unfunded cost of non-contributory pension schemes; iv. The likely impact of the recommendations on the finances of the State Governments which usually adopt the recommendations with some modifications; and v. The prevailing emolument structure, benefits and working conditions available to employees of Central Public Sector Undertakings and private sector.