The upcoming 8th Pay Commission for central government employees is likely to announce big changes in salaries, allowances, and pensions, effective January 1, 2026. Typically, there is a gap of 10 years between successive pay commissions. The term of the 7th Pay Commission will come to an end on December 31, 2025.
Although there were wide-ranging expectations that the Modi government would spell out the constitution of the 8th Pay Commission, it hasn’t been done yet. After its constitution, the Pay Commission usually takes 12-18 months to complete its report, keeping in mind the economic factors and requirements of the employees. The most pressing demands of employees are related to the enhancement of the fitment factor to at least 3.68 from the present 2.57 for calculating salaries and pension.
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With an enhanced fitment factor of 3.68, the possibility of a rise in basic salaries at all 18 Pay Matrix levels seems quite likely and plausible. For instance, at Pay Matrix Level 1, the basic pay was Rs 18,000 under the 7th CPC, which may increase to Rs 21,600 under the 8th CPC. At Pay Matrix Level 18, the basic salary at the highest rate will also increase from Rs 2.50 lakh to Rs 3 lakh.
Besides salary revision, the 8th Pay Commission is most likely to revise employees’ allowances, such as house rent allowance (HRA), transport allowance, and dearness allowance (DA), given the rise in inflation and living costs.
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The Indian government has yet to make an official announcement to the formation of the 8th Pay Commission, contrary to the expectations and demands. It had already been clarified by the finance secretary last year that this body is not going to be formed anytime soon. But, once formed, this commission would likely assuage the concerns of millions of pensioners and central government employees.
