Union Cabinet approves Terms of Reference for 8th Pay Commission; report due in 18 months and revised pay likely effective from Jan 1, 2026 — what employees & pensioners must know.
8th Pay Commission Approved
The Union Cabinet, led by Prime Minister Narendra Modi, has approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), paving the way for a new salary structure for central government employees and pensioners. The much-awaited decision is expected to bring cheer to millions of households, as the revised pay scale is likely to be implemented from January 1, 2026.
The 8th Pay Commission will review and recommend changes to salaries, allowances, and pensions for around 50 lakh employees and 69 lakh pensioners. The commission, headed by former Supreme Court judge Justice Ranjana Prakash Desai, will submit its report within 18 months. This move follows a similar pattern to the 7th Pay Commission, which had introduced significant revisions in 2016.
According to government officials, the Commission’s focus will include a review of the fitment factor, dearness allowance (DA) mechanism, pension revision, and fiscal impact on both central and state finances. The objective is to strike a balance between fair compensation and responsible fiscal management while aligning government salaries with private-sector standards.
Central government employees can expect discussions around interim relief, DA recalibration, and possible retrospective benefits. Pensioners, too, anticipate revised pension formulas that reflect current inflation trends and cost-of-living adjustments.
