The commission will determine hikes based on the fitment factor, a multiplier that influences basic salaries and pensions.
Union Minister of State for Finance, Pankaj Chaudhary, recently told the Lok Sabha that the 8th CPC was constituted on November 3, 2025, with Justice Ranjan Prabha Desai as Chairperson, Prof Pulak Ghosh as Part-time Member, and Pankaj Jain as Member-Secretary.
The commission is expected to submit its recommendations within 18 months.
While the tenure of the 7th Pay Commission ends on December 31, 2025, revised payouts are likely to be applicable from January 1, 2026.
Government employees and pensioners are expected to receive arrears once the recommendations are approved, though implementation may take up to two years.
A key clarification from the Finance Ministry confirmed that there is currently no proposal to merge Dearness Allowance (DA) or Dearness Relief (DR) with basic pay, ending speculation on social media and among employee unions.
DA and DR will continue to increase every six months based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).
The fitment factor will determine the extent of salary and pension increases.
For example, a factor of 2.15 could more than double the basic salary, boosting allowances like HRA, pensions, and other benefits calculated on the basic pay.
Policy discussions suggest that the 8th CPC recommendations could be implemented in fiscal year 2028, with arrears covering up to five quarters from January 1, 2026.
Experts have highlighted potential fiscal implications, estimating the combined payout for central and state governments at over ₹4 lakh crore, rising to around ₹9 lakh crore if arrears are included.
The government has emphasised that adequate budgetary provisions will be made to implement the commission’s recommendations once finalised, balancing employee benefits with fiscal responsibility.
