In a significant move for India’s central government workforce and pensioners, the Union Cabinet approved the Terms of Reference (ToR) for the 8th Central Pay Commission. The Commission will be headed by Justice Ranjana Prakash Desai, a former Supreme Court judge and Press Council of India chairperson. Joining her are one part-time member, Professor Pulak Ghosh of IIM Bangalore, and Member-Secretary Pankaj Jain, Secretary of the Ministry of Petroleum & Natural Gas. 
The panel has been given 18 months from its constitution to submit recommendations, expected to be effective retrospectively from 1 January 2026. It is estimated that around 50 lakh (5 million) serving central government employees and about 69 lakh (6.9 million) pensioners will benefit from the revision.

The ToR emphasises several factors: the country’s economic conditions and need for fiscal prudence; ensuring resources for welfare and developmental spending; the unfunded cost of non-contributory pension schemes; the impact on state government finances (as many states adopt central pay recommendations); and comparison with emoluments across central PSUs and the private sector.

While the final pay slabs and fitment factor have not yet been revealed, media estimates suggest salary increases could be significant, especially for mid-level employees. This approval marks a critical step in the pay-revision cycle, setting the stage for major changes in compensation, allowances and pension structure for government staff.