The Indian government has not included any potential expenses from the 8th Pay Commission’s recommendations in its 2025-26 budget, as the commission’s report may take up to a year to be submitted and approved. This was confirmed by Expenditures Secretary Manoj Govil in an interview.
Govil explained that the Ministry of Finance has already written to the Ministry of Defence, Ministry of Home Affairs, and the Department of Personnel and Training to discuss and finalize the terms of reference for the 8th Pay Commission. Once these terms are approved, the commission will begin its work.
“The 8th Pay Commission will start functioning after the terms of reference are approved,” Govil added. He pointed out that previous pay commissions have taken over a year to present their reports, and if the commission is formed by March 2025, it is expected to submit its report by March 2026. However, it is possible that the report may be submitted sooner.
Govil made it clear that the government does not expect any budgetary impact for the financial year 2025-26 from the 8th Pay Commission’s recommendations. “For FY26, we don’t foresee any impact from the 8th Pay Commission,” he said.
Prime Minister Narendra Modi approved the formation of the 8th Pay Commission for central government employees last month. The 7th Pay Commission, which is currently in operation, is set to conclude in 2026.
Pay commissions are established every 10 years to recommend changes in the salary structure for government employees.
Regarding the potential additional costs from the 8th Pay Commission’s implementation, Govil stated that it would be up to the commission to decide after considering the specific conditions at the time. “While we have some data from the 7th Pay Commission, each commission deals with different conditions, so it will be up to the commission to decide,” he explained.
Govil further clarified that even if the 8th Pay Commission’s recommendations are accepted in the financial year 2027, any impact on the 2025-26 budget would be minimal. If some recommendations take effect from January 1, 2026, the related expenses would be considered arrears and rolled over to the 2026-27 financial year.
