8th Pay Commission Update: This festive season may bring a double bonanza for Central government employees and pensioners. Apart from the routine hike
in Dearness Allowance (DA) expected before Diwali, preparations for the 8th Pay Commission, set to overhaul salaries and pensions from 2026, are also underway.
What is a DA hike and why does it matter?
Dearness Allowance is a cost-of-living adjustment paid to employees and pensioners to offset inflation. It is revised twice a year, in March and September, based on changes in the Consumer Price Index (CPI). The allowance helps cushion household budgets against rising prices, making it one of the most keenly awaited announcements for millions of families.
Currently, DA stands at 55% of basic pay. Experts expect the Centre to announce a 3% hike before Diwali, which would take DA to 58% of basic pay. This increase will directly benefit over 1.2 crore employees and pensioners, offering financial relief just ahead of the festival season.
The 8th Pay Commission: A bigger reset coming
While DA offers immediate relief from inflation, the 8th Pay Commission (CPC) promises a structural salary and pension revision. As per the National Confederation of Government Employees, the 8th CPC is likely to be implemented from January 1, 2026.
If approved, it could bring sweeping changes:
- Fitment factor (used to calculate revised salaries) may be raised from 2.57 under the 7th CPC to 2.86,
- Minimum basic pay could rise from Rs 18,000 to Rs 51,480,
- Minimum pensions may jump from Rs 9,000 to Rs 25,740,
- Overall, salaries and pensions could see a 30–34% increase.
Who will benefit?
The impact will be widespread:
- Around 50 lakh employees and 65 lakh pensioners will be directly covered,
- In total, over 1.15 crore people stand to gain once the 8th CPC takes effect.
What lies ahead
Although the Cabinet has given its nod in principle for the 8th CPC, the formal notification and Terms of Reference (ToR) are awaited. Experts also caution that timelines could shift, depending on fiscal considerations.
For now, employees can look forward to the immediate DA hike this Diwali, while the 8th Pay Commission in 2026 promises a far more substantial financial reset. Together, they mark a significant boost for household incomes in the coming years.
