The Union Cabinet on Tuesday announced the formation of the 8th Pay Commission with Justice Ranjana Prakash Desai as its head.

The commission will submit its award report for the revision of pay, pension, and allowances for 11.9 million central government staff and pensioners by April 2027. This means the fiscal impact will be deferred to FY28, and beyond.

While the enhanced pay and pension award will be implemented retrospectively from January 1, 2026, with arrears paid when the government implements it in FY28, the allowances are likely to be implemented prospectively, saving a decent sum for the exchequer.

The pay, pension, and allowances of the central government amount to a whopping Rs 7 lakh crore for FY26, accounting for 18% of its revenue expenditure. The Central government st

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