India to finalise 8th pay panel timeline, make required funding provisions: FinMin to Lok Sabha

The Finance Ministry has informed the Lok Sabha that the implementation date of the 8th Central Pay Commission (8th CPC) will be determined by the government at a later stage. It added that adequate budgetary provisions will be made to implement the recommendations that the government eventually approves.

The clarification comes amid earlier indications that the new pay panel could take effect from January 1, 2026. Some alternative timelines have also been discussed in policy circles, including a possible rollout from FY28 with arrears for five quarters starting January 1, 2026.

However, the ministry did not confirm any specific schedule in its latest statement.

According to the ministry, the pay panel will submit its recommendations within 18 months from the date of its constitution, which is November 3, 2025.

The government earlier confirmed that the 8th CPC has now been officially notified. Alongside this, it stated that there is no proposal under consideration to merge Dearness Allowance (DA) for employees or Dearness Relief (DR) for pensioners with the basic pay.

Concerns

over the fiscal implications of the new pay cycle have also been rising. Earlier,Neelkanth Mishra, Member of the Prime Minister’s Economic Advisory Council (EAC-PM), said that rolling out the 8th CPC in FY28 could significantly strain public finances.

He estimated the combined payout for the Centre and states at over ₹4 lakh crore, with the burden climbing to around ₹9 lakh crore if five quarters of arrears are added.