New Delhi: The central government has officially set up the 8th Pay Commission to revise salaries and pensions for central government employees and pensioners. While the 7th Pay Commission’s 10-year tenure is ending, the government has clarified that the implementation date of the 8th Pay Commission is yet to be decided.
Minister of State for Finance, Pankaj Chaudhary, stated in the Lok Sabha that the commission’s terms of reference (ToR) have been notified. The 8th Pay Commission will formulate its recommendations within 18 months from its constitution and propose methodology and procedures for salary revisions.
No Merger of DA with Basic Pay for Now
Chaudhary added that there is currently no proposal to merge the existing dearness allowance (DA) or dearness relief (DR) with basic pay or pensions. Presently, both DA and DR stand at 55 percent, with periodic revisions every six months based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).
Fitment Factor and Salary Hike Expectations
The 8th Pay Commission is expected to suggest a fitment factor similar to previous panels. Financial services firm Ambit Capital estimates the fitment factor could range from 1.83 to 2.46, raising the minimum salary of central government employees from Rs 18,000 to between Rs 32,940 and Rs 44,280. Real pay hikes could range from 14 percent to a maximum of 54 percent, though the highest increase is unlikely due to financial constraints.
Impact on Employees and Pensioners
The recommendations will affect over 50 lakh central government employees and 65 lakh pensioners. The 8th Pay Commission aims to revise basic pay, pensions, and allowances, directly benefiting millions, while ensuring that inflation and cost-of-living adjustments are properly considered.
Timeline and Concerns
Though the 8th Pay Commission was announced in January 2025 and headed by Justice (Retd.) Ranjana Desai, delays in appointments and ToR clarifications mean that a January 1, 2026 rollout is uncertain. Employee unions have raised concerns that pensioners may not be fully included, urging government amendments.
The final salary revisions will be determined after the commission submits its recommendations within the stipulated 18 months.
