The Union Cabinet has approved the Terms of Reference (ToR) for the Eighth Pay Commission, which will revise pay for around 50 lakh Central government employees.
Justice (Retd.) Ranjana Prakash Desai will head the three-member panel, with Prof. Pulak Ghosh (IIM Bangalore) and Pankaj Jain (Petroleum Secretary) as members.
The Commission will submit its report within 18 months, and the revised salaries are expected to take effect from January 1, 2026.
A fitment factor of 2.86 is being considered, with potential salary hikes of up to ₹19,000 per month, according to reports.
Eighth Pay Commission 2025: Centre Approves Terms of Reference, Salary Hike Likely from January 2026
Union Minister of State for Finance Pankaj Chaudhary stated that the implementation of the Commission’s recommendations will take place once they are formally accepted by the government
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The Union Cabinet on Tuesday approved the Terms of Reference (ToR) for the Eighth Pay Commission, which will revise the salaries of around 50 lakh central government employees, reports said. Former Supreme Court judge Ranjana Prakash Desai will serve as the Chairperson of the Committee.
According to Information and Broadcasting Minister Ashwini Vaishnaw, the Pay Commission will submit its recommendations within 18 months and the revised pay structure is expected to come into effect from January 1, 2026. Vaishnaw added that the ToR was finalised after inter-ministerial consultations, discussions with state governments, and consultations with the staff side of the Joint Consultative Machinery, The Hindustan Times reported.
The Central Government usually constitutes a pay commission every 10 years to revise the salaries of government employees. Union Minister of State for Finance Pankaj Chaudhary stated that the implementation of the Commission’s recommendations will take place once they are formally accepted by the government.
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Composition of the Eighth Pay Commission
The Eighth Pay Commission is a three-member panel headed by Justice (Retd.) Ranjana Prakash Desai. Prof. Pulak Ghosh, IIM Bangalore, serves as the part-time member while Pankaj Jain, Secretary, Ministry of Petroleum and Natural Gas, is the Member-Secretary.
The Eighth Central Pay Commission will take into account the following factors:
1. Domestic economic conditions and the need for fiscal prudence
2. The requirement to ensure adequate resources for developmental and welfare expenditure
3. The unfunded cost of non-contributory pension scheme
4. The impact of its recommendations on the finances of state governments, which often adopt the Centre’s pay revisions with modifications
5. The prevailing pay structure, benefits, and working conditions of employees in Central Public Sector Undertakings and the private sector
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