The Union Cabinet on Tuesday approved the formation of the 8th Pay Commission, a decision that will benefit over 5 million (50 lakh) central government employees and more than 6.9 million (69 lakh) pensioners across India.
The commission is expected to submit its recommendations within 18 months of its formation.
During a press briefing following the Cabinet meeting on Tuesday, Union Minister Ashwini Vaishnaw confirmed the approval. He stated that the 8th Pay Commission is likely to come into effect from January 1, 2026. Vaishnaw added that the terms of reference have been finalized after consultations with various ministries, state governments, and representatives of employee associations under the Joint Consultative Machinery (JCM).
Pay Commissions Formed Every 10 Years
The central government had informed Parliament in July that it had sought inputs and suggestions from key stakeholders, including the Ministry of Defence, Ministry of Home Affairs, Department of Personnel and Training, and various state governments, regarding the formation of the 8th Pay Commission.
Minister of State for Finance Pankaj Chaudhary had said at the time that once the recommendations of the commission are approved by the government, they will be implemented accordingly.
The government typically sets up a Pay Commission every 10 years to review and revise the salary structures of government employees.
The 7th Pay Commission was constituted in February 2014, and its recommendations were implemented from January 1, 2016.
For the 8th Pay Commission, Justice Ranjana Prakash Desai has been appointed as the Chairperson, while Professor Pulak Ghosh from IIM Bangalore and Pankaj Jain, Secretary of the Ministry of Petroleum and Natural Gas, have been appointed as members.
How Much Salary Hike Can Be Expected?
Although no official data has been released yet about the expected salary hike under the 8th Pay Commission, speculation suggests that there could be a significant increase in government employees’ salaries.
For instance, a Lower Division Clerk (LDC) currently has a grade pay of ₹1,900 and, under the 7th Pay Commission, a basic salary of ₹18,000.
Including House Rent Allowance (HRA), Dearness Allowance (DA), and Travel Allowance (TA), the total monthly salary ranges between ₹37,120 and ₹39,370.
The Pay Commission bases its recommendations on the fitment factor and the minimum basic salary. Under the 7th Pay Commission, the fitment factor was 2.57 times, whereas in the 8th Pay Commission, it is expected to be between 3 to 3.42 times.
If we take 3 times as the reference fitment factor, the basic salary of a Lower Division Clerk could increase to around ₹59,700 per month.
