The Union government has officially established the 8th Central Pay Commission, which will impact approximately 50 lakh central government employees and 69 lakh pensioners. The Cabinet has approved the Terms of Reference (ToR) for the commission, marking the start of its operations. The commission is expected to submit its recommendations within 18 months, with changes likely to take effect from January 1, 2026.

Justice Ranjana Prakash Desai, a former Supreme Court judge, will chair the commission. She has held significant roles post-retirement, including leading a panel for the Uniform Civil Code in Gujarat. Professor Pulak Ghosh from IIM Bangalore will serve as a part-time member, focusing on technology and its implications for finance and policy. Senior IAS officer Pankaj Jain, currently Secretary in the Ministry of Petroleum and Natural Gas, has been appointed as the Member-Secretary.

The commission's mandate includes reviewing salary structures and post-retirement benefits for central government staff. It will also consider the economic conditions of the country, the need for fiscal prudence, and the implications of its recommendations on state government finances. The commission will assess the current emolument structure and working conditions of employees in both the public and private sectors.

While specific salary hikes are yet to be determined, the fitment factor, a key element in calculating revised salaries, is expected to range between 1.83 and 2.46. This multiplier will significantly influence the pay increases for employees and pensioners. The commission's recommendations will aim to adjust compensation in line with inflation and the cost of living, ensuring that the financial needs of government employees and pensioners are met effectively.

The establishment of the 8th Pay Commission comes after a nine-month wait since the initial approval for its formation. The commission's findings will be crucial for enhancing the financial well-being of millions of central government employees and pensioners across the country.