8th Pay Commission Update: The 10-year term of the 7th Pay Commission is set to end on December 31, 2025, raising questions among central government employees about their salary revisions from January
1, 2026. With the 8th Pay Commission yet to be implemented, sources said the employees will continue to receive salaries and DA hike as per the 7th Pay Commission. However, they said the revised salaries should become due and paid retrospectively once the 8th Pay Commission comes into force.
The 8th Pay Commission, which was notified in November this year, will submit its report to the government within 18 months (May 2027). Analysts say the 8th CPC is expected to be implemented in late 2027 or early 2028.
Will Central Govt Employees’ Salaries Be Revised From January 1, 2026?
A source in the employee unions told news18.com that the date of effect is not given under the terms of reference (ToR) of the 8th Pay Commission. They added that revised salaries under the 8th Pay Commission should become due with effect from January 1, 2026, as the 7th CPC’s term ends on December 31, 2025. Previously, salary arrears (basic pay and dearness allowance) were paid to the employees after the new pay panel was implemented.
“Generally, pay commissions are implemented with retrospective effect. Under the 8th Pay Commission also, we demand that the revised salaries should become due from January 1, 2026, as the term of the 7th Central Pay Commission ends on December 31, 2025. Accordingly, employees should receive arrears once the new pay panel is implemented. However, no date of effect is mentioned in the ToR. The 8th Pay Commission is expected to be implemented only by late 2027 or early 2028,” the source said.
He, however, mentioned that previous pay commissions’ ToR had clearly specified the date from which revised salaries would take effect. However, the terms of reference of the 8th Pay Commission do not mention any such salary revision date. He said the Confederation of Central Government Employees and Workers (CCGEW) has raised this concern with Prime Minister Narendra Modi through a letter last month.
In the letter to the PM, the Confederation of Central Government Employees and Workers said, “We request for amendment to the Terms of Reference (ToR) of 8th Central Pay Commission… The date of effect of the recommendation of the 8th CPC. In the Terms of Reference (ToR) given to the 8th CPC, no reference is made to the date of effect of the 8th CPC. You will appreciate that it is now an established fact that the Revision of the Central Government Employees wages, allowances and Pensionary benefits will take place once in 10 years.”
The letter added that the 8th CPC recommendations should be implemented with effect from January 1, 2026. The same may please be included in the Terms of Reference (ToR) of 8th CPC.
Generally, a pay commission becomes effective every 10 years. The 7th Pay Commission became effective from January 1, 2016. The 6th CPC was implemented with effect from January 1, 2006. The previous two commissions, 5th CPC and 4th CPC, were also implemented from January 1, 1996, and January 1, 1986.
The 8th Central Pay Commission was notified on November 3, 2024, and is mandated to submit its report within 18 months, by May 3, 2027. Thereafter, a group of ministers (GoM) will deliberate on the recommendations and submit its views to the government, following which the Union Cabinet will take a final decision. The entire process is likely to take close to two years.
Will DA Be Merged With Basic Pay Under 7th Pay Commission From January 1?
No. Union Minister of State for Finance Pankaj Chaudhary earlier this month said the central government has notified the constitution of the 8th Central Pay Commission, and there is no proposal as of now to merge the existing dearness allowance (DA) or dearness relief (DR) with the basic pay.
“No proposal regarding merger of the existing dearness allowance with the basic pay is under consideration with the government at present. In order to adjust the cost of living and to protect basic pay/ pension from erosion in real value on account of inflation, the rates of DA/ DR are revised periodically every six months on the basis of the All India Consumer Price Index for Industrial Workers (AICPI-IW) released by Labour Bureau, Ministry of Labour and Employment,” Chaudhary said in response to a query in the Lok Sabha.
8th Pay Commission: How Much Will Salaries Increase?
The staff side of National Council-Joint Consultative Machinery (NC-JCM), earlier, told NDTV Profit that it is expected that 8th pay commission to recommend a fitment factor that could be similar to 7th pay panel.
Ambit report in July suggested that the fitment factor is expected to be fixed in the range of 1.83 to 2.46.
“As per back-of-the-envelope calculations, depending on the salary growth seen over different Pay Commissions, the range of fitment factors that the government could be looking at lies between 1.83 and 2.46,” financial services firm Ambit Capital said in a report.
8th Pay Commission Salary Calculator: How Much Salary Will Be Increased?
Going by Ambit Capital’s expectation of a fitment factor between 1.83 and 2.46, the minimum salary of central government employees may be fixed between Rs 32,940 and Rs 44,280, compared with the current Rs 18,000 a month.
A fitment factor of 1.83 would raise the basic salary from Rs 18,000 to around Rs 32,940, while a factor of 2.46 would raise it to Rs 44,280.
The final increase in salaries will depend on the fitment factor decided. The 8th Pay Commission will revise salaries, pensions, and allowances, directly benefiting over 50 lakh central government employees and over 65 lakh pensioners.
Ambit Capital in the report estimates that the 8th Pay Commission may result in a minimum 14% real hike in pay (including Basic Pay+DA) and a maximum of 54%. However, the maximum 54% hike in real pay is highly unlikely as the government could face significant financial challenges in implementing the same.
“While the government might consider a higher increase, potentially using it as a consumption stimulus, expecting a substantial 54% jump (as seen during the 6th Pay Commission) seems unlikely, since it could face significant financing challenges,” the report said.
