The Union Cabinet on Tuesday approved the formation of the Eighth Central Pay Commission, a move set to benefit over 5 million central government employees and 6.9 million pensioners across the country.
Announcing the decision, Union Minister Ashwini Vaishnaw said the commission will submit its recommendations within 18 months of its constitution. The recommendations are likely to be implemented from January 1, 2026, he added.
Vaishnaw further informed that the terms of reference for the 8th Pay Commission have been finalized after consultations with various ministries, state governments, and representatives of employees through the Joint Consultative Machinery (JCM).
Earlier in July, the government had informed Parliament that it had sought inputs from key stakeholders — including the Ministries of Defence, Home Affairs, Personnel and Training, and various state governments — regarding the formation of the new pay panel. Minister of State for Finance Pankaj Chaudhary had then stated that the commission’s recommendations would be implemented after government approval.
The central government typically constitutes a new pay commission every ten years to revise the salaries of its employees. The Seventh Pay Commission was formed in February 2014, and its recommendations were implemented from January 1, 2016.
The government has appointed Justice Ranjana Prakash Desai as Chairperson of the 8th Pay Commission, with Professor Pulak Ghosh of IIM Bangalore and Pankaj Jain, Secretary, Ministry of Petroleum and Natural Gas, as members.
While no official figures have been released regarding the expected salary increase, estimates suggest a significant hike. For instance, a Lower Division Clerk (LDC) currently has a grade pay of ₹1,900 and a basic salary of ₹18,000 under the 7th Pay Commission. Including allowances such as HRA, DA, and travel allowance, the total pay amounts to approximately ₹37,000–₹39,000 per month.
Under the 7th Pay Commission, the fitment factor—used to calculate the new basic pay—was 2.57 times. The 8th Pay Commission is expected to raise this to 3.0–3.42 times, which could push the LDC’s basic pay up to around ₹59,700 per month.
