8th Pay Commission approved: Former SC Judge Ranjana Prakash Desai to head panel; salary hike likely from January 2026
PTC Web Desk: In a major decision that will impact nearly 1.2 crore Central government employees and pensioners, the Union Cabinet on Tuesday approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC). The commission will revise the pay, pensions, and allowances of around 50 lakh serving employees and 69 lakh pensioners across India, paving the way for a significant salary revision from January 1, 2026.
The 8th Pay Commission will be chaired by former Supreme Court judge Ranjana Prakash Desai, with Professor Pulak Ghosh as the member and Pankaj Jain as the member-secretary. The panel has been granted 18 months to submit its report and may also present an interim report to the government before final implementation.
Addressing the media after the Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw said the ToR was finalised after extensive consultations with various ministries, state governments and representatives of the staff side of the Joint Consultative Machinery (JCM). He confirmed that the commission’s recommendations are “expected to come into effect from January 1, 2026” once the report is submitted and approved by the government.
The Cabinet had earlier, in January 2025, given an in-principle approval to set up the 8th Pay Commission, following the tradition of revising Central government pay scales roughly every 10 years. The 7th Pay Commission, constituted in February 2014, had implemented its recommendations from January 1, 2016.
According to Union Minister of State for Finance Pankaj Chaudhary, the government will implement the new pay scales once the recommendations are accepted. The ToR approval now formally initiates the process that will lead to the revision of salaries and pensions by 2026.
Expected pay hike and fitment factor
While the official salary slabs are yet to be announced, projections suggest that Central government employees may receive substantial salary hikes under the new structure. Experts expect the fitment factor, the key multiplier used to determine pay increases, to play a decisive role in shaping the final outcome.
In the 7th Pay Commission, a fitment factor of 2.57 was applied, resulting in a 157% hike, with the minimum basic pay raised from Rs 7,000 to Rs 18,000 per month. If a fitment factor of 2.86 is applied this time, the minimum basic salary could rise to Rs 46,260 per month, and the minimum pension could increase from Rs 9,000 to Rs 23,130.
According to preliminary estimates, salary hikes could vary depending on the government’s budgetary allocation:
With a Rs 1.75 lakh crore allocation, mid-level employees earning Rs 1 lakh per month could see a 14% rise, taking their salary to Rs 1.14 lakh per month.
With a Rs 2 lakh crore allocation, the increase could be around 16%, raising salaries to Rs 1.16 lakh per month.
With a Rs 2.25 lakh crore allocation, salaries could rise by 18%, touching Rs 1.18 lakh per month.
The commission will also review the Dearness Allowance (DA) formula to ensure compensation for inflation-induced erosion in real income. The DA, currently revised every six months based on inflation data, will continue to play a crucial role until the new pay structure takes effect.
- With inputs from agencies
