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Centre Clears 8th Pay Commission Mandate, Names Three-Member Panel to Recast Pay and Pensions

The brief adds a requirement to weigh the unfunded cost of old-style pensions, signaling a fiscally cautious review.

Overview

  • Former Supreme Court judge Justice Ranjana Prakash Desai will chair the commission, with IIM Bangalore’s Pulak Ghosh as part-time member and Petroleum Secretary Pankaj Jain as member-secretary, and the report is due in 18 months.
  • The revisions are slated to take effect retrospectively from January 1, 2026, with implementation and arrears widely expected to be processed in 2027–28.
  • The panel will review pay structures, allowances and pensions for roughly 1.2 crore people, and its recommendations typically influence state government pay decisions.
  • A new clause instructs the commission to consider the unfunded cost of non-contributory pensions, a sensitive point for Old Pension Scheme beneficiaries as employee groups continue to press for OPS restoration.
  • The fiscal setting is tight, with pay, pensions and allowances estimated at over Rs 7 lakh crore in 2025–26—about 18% of revenue expenditure—while key choices such as the fitment factor (2.57 in the 7th CPC) remain to be decided.