Coming days after Diwali and just ahead of the Bihar elections, the Cabinet approval of the terms of reference for the Eighth Pay Commission is set to be good news for over 5 million central government employees and nearly 6 million pensioners and is expected to give a boost to consumption demand over the next two years as well. Advertisement

As per the decision of the Union Cabinet on Tuesday, the pay commission will make its recommendations within 18 months of the date of its constitution, but the recommendations are likely to be effective from January 1, 2026.

This would mean that the Pay Commission may submit its recommendations to the Centre by April or May 2027, having little impact on the Budget math for the next fiscal.

As on March 1, 2026, the Centre had about 3.7 million empl

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