The Union Cabinet on Thursday approved the formation of the Eighth Central Pay Commission in 2026, said Union minister Ashwini Vaishnaw.

The approval comes almost a year before the term of the current pay commission is scheduled to conclude on December 31, 2025. The Seventh Pay Commission started functioning in 2014, submitted its report in 2015 and was approved by the Cabinet in June 2016. The new pay scale recommended by the commission was implemented by November 2016.

Vaishnaw said that starting the process for the Eighth Pay Commission early would provide enough time for the panel to receive and evaluate its recommendations before the term of the Seventh Pay Commission concludes.

Pay commissions are set up every 10 years by the Centre to revise salaries and pensions of Union government employees. There have been seven pay commissions since Independence.

The recommendations of the Eighth Pay Commission will impact the salaries of nearly 50 lakh Union government employees and allowances of 65 lakh pensioners, PTI reported.

The approval on Thursday came ahead of the presentation of the Union Budget on February 1.

The Seventh Pay Commission recommended a 23.5% increase in the pay and pensions of government employees.

According to the current pay bands, a government official at the highest level has a salary of Rs 2.25 lakh per month while a cabinet secretary is paid Rs 2.5 lakh a month as compared to less than Rs 1 lakh a month earlier.

Vaishnaw said on Thursday that the chairman and two members of the commission would be appointed soon.

“We are all proud of the efforts of all government employees, who work to build a Viksit Bharat,” Prime Minister Narendra Modi said on social media. “The Cabinet’s decision on the 8th Pay Commission will improve quality of life and give a boost to consumption.”