Cabinet approves terms of reference for 8th Central Pay Commission

The Union Cabinet has approved the Terms of Reference of 8th Central Pay Commission and it is likely to come into effect from January 1, 2026, Briefing the media after the Cabinet meeting in New Delhi on Tuesday, Information and Broadcasting Minister Ashwini Vaishnaw said that the Commission will make its recommendations within 18 months from the date of its constitution. He informed that the Commission will comprise one Chairperson, one Part-time Member, and one Member-Secretary. The recommendations of the pay panel will benefit about 50 lakh central government employees and 69 lakh pensioners.
The 8th Central Pay Commission's deliberations will consider:
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.
The 8th Pay Commission, led by former Supreme Court justice Ranjana Prakash Desai, will deliver a preliminary report to the government. Professor Pulak Ghosh from IIM Bangalore has been appointed as a part-time commissioner, whilst Petroleum Secretary Pankaj Jain will serve as the Member Secretary.
The Central Pay Commissions are periodically constituted to go into various issues of emoluments structure, retirement benefits and other service conditions of Central Government employees and to make recommendations on the changes required thereon. Usually, the recommendations of the pay commissions are implemented after a gap of every ten years. Going by this trend, the effect of the 8th Central Pay Commission recommendations would normally be expected from 01.01.2026.The Government had announced formation of the 8th Central Pay Commission in January, 2025 to examine and recommend changes in the Salaries and other benefits of Central Government employees.
The Cabinet also approved the Nutrient-Based Subsidy rates for Rabi Season 2025- 26 on Phosphatic and Potassic fertilisers. Vaishnaw said that the Cabinet has approved a subsidy of about 37 thousand 952 crore rupees for Rabi 2025 and the rates will be applicable from 1st of October. He added that this initiative will ensure the availability of fertilizers to farmers at subsidized, affordable, and reasonable prices. He further said that the subsidy on phosphatic and potassic fertilizers has been rationalized in view of recent trends in international prices of fertilizers and their inputs.