New Delhi: The Union cabinet on Tuesday approved the Terms of Reference (ToR) of 8th Pay Commission, which will revise the salaries of nearly 50 lakh Central Government employees. Former Supreme Court judge Ranjana Prakash Desai will be heading the Commission as the chairperson.
The Eighth Pay panel will submit recommendations within 18 months and it is likely to come into effect from January 1, 2026, I&B Minister Ashwini Vaishnaw said on Tuesday at a Cabinet briefing. In January, the Cabinet approved setting up the 8th Pay Commission to revise salaries of Central Government employees and allowances of about 69 lakh pensioners.
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28 Oct 2025
While Justice Ranjana Prakash Desai will head the Commission, Professor Pulak Ghosh will be the member, and Pankaj Jain the member-secretary of the same.
Announcing decisions at the Cabinet briefing on Tuesday, Ashwini Vaishnaw said the ToR has been finalised after consultations with various ministries, state governments and staff side of joint consultative machinery
The government informed in Parliament in July it had sought inputs from major stakeholders, including the defence and home ministries, the department of personnel and training, as well as states, on setting up the 8th Central Pay Commission.
Asked when the revised pay scales will be implemented for the employees and pensioners, Union Minister of State for Finance Pankaj Chaudhary had said back then that the implementation would be taken up “once the recommendations are made by the 8th CPC and are accepted by the government”.
The Pay Commission is usually constituted by Centre every 10 years to revise the remuneration of government employees.
The 7th Pay Commission was constituted in February 2014 and its recommendations were implemented from January 1, 2016. The 8th Pay Commission is due for implementation on January 1, 2026.
To compensate Central Government employees for erosion in the real value of their salaries on account of inflation, dearness allowance (DA) is disbursed and the rate of DA is revised periodically every six months on the basis of the rate of inflation.
The government has approved the 8th Central Pay Commission (8th CPC), setting the stage for a comprehensive review of salaries, allowances, and pensions for central government employees and retirees.
The 8th Pay Commission is expected to review and revise pay structures, allowances and pension benefits across departments. Once implemented, the recommendations could bring significant changes to compensation for both serving employees and retirees.
Earlier reports had indicated that the commission might evaluate a fitment factor of around 1.8x for basic pay revision, though the government has not yet disclosed specific pay parameters.
The Commission may send interim recommendations if any part of its work is concluded early. While making recommendations, it will consider:
• Economic conditions and fiscal prudence
• Availability of resources for development and welfare spending
• Unfunded pension liabilities under non-contributory schemes
• Likely financial impact on state governments adopting the award
• Emoluments and working conditions in CPSEs and the private sector
The Union Cabinet first approved the formation of the 8th Pay Commission in January 2025. With the ToR now finalised, the process formally begins.
Pay commissions are typically constituted every decade. The 7th Pay Commission, set up in 2014, submitted its report in 2015, with rollout from January 1, 2016. The 6th Pay Commission followed a similar timeline with effect from January 2006.
The 8th CPC is expected to complete its work by mid-2027, after which the government will take a decision on implementation.
