Union cabinet approves establishment of 8th central pay commission, 3rd rocket launch pad

New Delhi: Ahead of the FY26 budget and assembly elections in Delhi, the Union cabinet on Thursday approved the setting up of the eighth central pay commission to revise the payment and pension of government employees.

The budget is scheduled to be presented on 1 February while the Delhi elections are on 5 February. When elections are scheduled in certain states, like Delhi in 2025, the government is typically cautious about announcing major policy changes or financial benefits during the election period.

This announcement is expected to benefit over 10 million Central government employees and pensioners through revisions in their basic pay, allowances, pension, and perks.

Making the announcement, Union minister Ashwini Vaishnaw said that the commission will likely be formed by 2026. The Centre implemented the seventh Pay Commission’s recommendations starting in January 2016, and the panel’s term is expected to conclude by the end of this year. The eighth pay commission will be set up by 2026 after consultation with central and state government officials and PSUs, and the chairman will be designated accordingly, he said.

Vaishnaw said the recommendations of the seventh pay commission have already been implemented. The government will later inform about other details of the commission, including its members.

Also read: Another pay commission? The government should hold its horses

“Around 5 million central government employees, including defence personnel will benefit from the setting up of eight central pay commissions. Approximately 6.5 million pensioners, including defence persons, will also see an uptick in their pensions. About 400,000 employees in Delhi will benefit, including defence and Delhi government employees,” said a government official.

The Seventh Pay Commission brought significant changes to the salary structure, allowances, and pensions of central government employees, ensuring pay parity and benefiting both active and retired employees.

“Typically, Delhi government employees see their salaries increased with the Central pay commission. The 7th pay commission saw an expenditure increase of ₹1 trillion for FY 2016-17. This will provide a significant boost to consumption and economic growth, along with improved quality of life for govt employees,” the official disclosed.

"The 10-yearly revisions in salaries and pensions usually lead to a step increase in the growth of revenue expenditures. For example, the growth in GoI’s revenue expenditure in 2016-17 was 9.9% as against 4.8% in the previous year. Such an increase in 2026-27 would also have implications for the available fiscal space for growth of GoI’s capital expenditures," said D.K. Srivastava, chief policy advisor, EY India

Third Launch Pad launch

The Union cabinet also approved the establishment of the Third Launch Pad (TLP) at Satish Dhawan Space Centre of ISRO at Sriharikota, Andhra Pradesh with an outlay of ₹3,985 crore. The Third Launch Pad (TLP) is meant for the next generation launch vehicles of ISRO to support as standby launch pad for the second launch pad at Sriharikota. This will also enhance the launch capacity for future Indian human spaceflight missions, according to an official statement.

Also read: FM, trade unions discuss reconvening of the Indian Labour Conference, the 8th pay commission

The TLP is designed to have configuration that is as universal and adaptable as possible that can support not only NGLV but also the LVM3 vehicles with Semicryogenic stage as well as scaled up configurations of NGLV. It will be realized with maximum industry participation fully utilizing ISRO’s experience in establishing the earlier launch pads and maximally sharing the existing launch complex facilities. TLP is targeted to be established within a duration of 48 months or 4 years.

The TLP project will establish launch pad facilities of jet deflector, Propellant Storage & servicing facilities for liquid methane and cryo, range systems and checkout interfaces, instrumentation and control, electronic support facilities, launch tower and lightening suppression systems.

'The 10-yearly revisions in salaries and pensions usually lead to a step increase in the growth of revenue expenditures. For example, the growth in GoI’s revenue expenditure in 2016-17 was 9.9% as against 4.8% in the previous year. Such an increase in 2026-27 would also have implications for the available fiscal space for growth of GoI’s capital expenditures," said D.K. Srivastava, Chief Policy Advisor, EY India

Gireesh Chandra Prasad contributed to this story.

Also read: Commerce ministry to bring SoP for data collection amid concerns over gold import mismatch