Outlook Business Desk
Nearly 35 lakh central government employees and 67 lakh pensioners await clarity on the 8th Pay Commission. While hopes rise for pay hikes and revised pension benefits, the government has yet to make any official announcement.
Employee unions are raising concerns over the delay in forming the 8th Pay Commission. They’re urging the government to act early to ensure smooth implementation and reduce uncertainty for lakhs of employees and pensioners.
Unlike the 7th Pay Commission, announced in September 2013 two years ahead of its rollout, the 8th Pay Commission hasn't even been formed as of mid-2025. With no Terms of Reference finalised (ToR) yet, a January 2026 implementation now seems unlikely.
Senior officials say talks have started, but things are moving slowly. Because of this, the rollout may not happen by January 1, 2026. Even if the Commission is set up by the end of this year, past trends show it could take 18–24 months — meaning the pay hike may only come by late 2026 or early 2027, as reported by The Economic Times.
The delay is also linked to fiscal constraints, as the government tries to balance welfare schemes, election promises and fiscal deficit goals. A large pay hike could strain the exchequer, making policymakers proceed with caution.
Salary revisions hinge on the fitment factor — 2.57 in the 7th Pay Commission, raising pay from ₹7,000 to ₹18,000. Experts expect the 8th Pay Commission to suggest a 2.5–2.86 range. A 2.86x hike could raise basic salary above ₹51,000, but a 2.6–2.7x increase appears more feasible due to fiscal limits.
With Dearness Allowance (DA) at 55% (as of Jan 2025), it's likely to be merged with basic pay before the 8th Pay Commission rollout. A final DA hike, due July 2025, may also be added. This boosts gross salary and allowances like HRA, but resets DA to zero — though future hikes will be on a higher base, leading to larger pay jumps.
Around 67 lakh pensioners also await the 8th Pay Commission, which may revise pension formulas and benefits. With Dearness Relief (DR) likely to merge into basic pension, payouts could change significantly. Retired employees’ groups are urging the government for clarity on the recalculation process.
A revised pay structure is likely, though it may take time. Minimum salaries could rise to ₹40,000–₹45,000, with pension changes also expected. DA will reset, but higher allowances may make up for it. Implementation may be delayed beyond January 2026 due to pending approvals.