It will be applicable from 1st of January, 2016.
The government hopes that the new measures will help attract and retain talented teachers, and also boost quality of higher education.
Union HRD Minister Prakash Javadekar said that the decision would benefit 7.58 lakh teachers and equivalent academic staff in 106 universities/colleges which are funded by UGC or HRD Ministry as also 329 universities funded by state governments and 12,912 government and private aided colleges affiliated to state universities.
Extending benefits of the 7th Pay Commission, the Cabinet on Wednesday revised pay scales of around 8 lakh teachers in central and state universities.
"This amounts to an increase of around 22% - 28%", Javadekar said in the briefing.
The revised pay package will also be extended to teachers at 119 centrally-funded technical institutions such as Indian Institute of Technology (IIT), Indian Institute of Management (IIM), Indian Institute of Science (IISc), National Institute of Industrial Engineering (NITIE) and IIITs.
Assistant Professors who are presently getting Rs 47,000 (at entry level) will now get Rs 57,700.
Similarly, Associate Professors will draw a salary of Rs 1,31,000, Professors Rs 1,44,000 and Senior Professors Rs 1,82000.
In July, the government had notified the recommendations of the 7th Central Pay Commission on allowances with 34 modifications, with a total financial implication of Rs 30,748.23 crore per annum. This will enhance the teachers' pay in the range of Rs 10,400 and Rs 49,800.
Over 7.5 lakh teachers will be benefited from this decision. The Centre will bear ₹1,400 crore per year on this, while the States will have to pay out an additional ₹8,400 crore.
Adding: "For state government-funded institutions, the revised pay scales will require adoption by the respective governments".