Written by: Kashmira Gogoi
Justice Ranjana Prakash Desai has been appointed as the chairperson of the 8th Pay Commission. The commission is currently in the consultation stage, with the Government of India having issued the Terms of Reference in November 2025.
Separately, the government approved a 2% increase in Dearness Allowance (DA) and Dearness Relief (DR), effective from January 1, 2026. This increase is independent of the commission’s recommendations, which are still under discussion.
Among the major issues being debated are pension reforms, restoration of the Old Pension Scheme (OPS), revision of the fitment factor, and a substantial increase in minimum basic pay. Reports and employee union demands suggest that the fitment factor could rise from 2.57 under the 7th Central Pay Commission (CPC) to 3.83 under the 8th Pay Commission. If implemented, this could raise the minimum basic pay from ?18,000 to around ?69,000.
There are also proposals to improve annual increments, with some demands calling for an increase from 3% to 6%. However, final decisions on these matters will depend on the commission’s recommendations and subsequent government approval.
Background: Evolution of Pay Commissions in India
India’s pay commissions have played a key role in revising the salary, allowances, and pension structures of Central Government employees over the decades.
The 7th Pay Commission introduced a structured Pay Matrix system to simplify pay levels and career progression. It also applied a uniform fitment factor of 2.57 to convert pay scales from the 6th CPC.
The 7th CPC drew partly on the Aykroyd Formula, which estimates living costs based on nutritional requirements. The formula considered a consumption unit family and calorie requirements of approximately 2,700 calories per day for a working adult male. This method has historically influenced wage calculations in India.
The commission also continued the National Pension System (NPS) for employees recruited after January 1, 2004, rather than restoring the Old Pension Scheme.
India’s First Pay Commission
India’s first Pay Commission was established in May 1946 under the chairmanship of Srinivasa Varadachariar. It was formed in response to post-war inflation and the need to modernize colonial-era salary structures.
The commission aimed to establish a “living wage” for central government employees and defence personnel. Its recommendations included increasing the minimum monthly basic pay for Class IV employees from ?10 to ?30 and for Class III employees from ?35 to ?60.
These reforms laid the foundation for later pay commissions in independent India.
Current Status of the 8th Pay Commission
The 8th Pay Commission invited public suggestions until March 16, 2026. Discussions with staff representatives and consultative bodies have continued through 2026.
A meeting of the National Council (JCM) drafting committee was reportedly held on April 13, 2026, where issues such as the 3.83 fitment factor and revised minimum pay were discussed.
Implementation of the 8th Pay Commission is widely expected in 2027, although final timelines will depend on the submission of recommendations and government approval. If approved, revised pay scales may be applied retrospectively with arrears from the notified effective date.