8th Pay Commission good news: Govt starts discussions on salary hike; check expected basic pay and dearness allowance

Time of India

22-07-2025

The government has started preliminary consultations to set up the 8th Central Pay Commission (CPC), which is likely to revise the pay, allowances, and pensions of central government employees and pensioners. The commission's recommendations are expected to be implemented from January 1, 2026.
8th Pay Commission News
According to a PTI report, the Ministry of Finance has initiated discussions with major stakeholders including the Ministry of Defence, Ministry of Home Affairs, Department of Personnel and Training, and various state governments. These talks aim to gather inputs for the formation of the commission.
Explore courses from Top Institutes in
Select a Course Category
Data Analytics
Project Management
Cybersecurity
Healthcare
Data Science
Data Science
MCA
Finance
PGDM
Design Thinking
CXO
Digital Marketing
Management
Public Policy
Operations Management
Technology
Others
Product Management
Degree
Leadership
MBA
others
Artificial Intelligence
healthcare
Skills you'll gain:
Data Analysis & Visualization
Predictive Analytics & Machine Learning
Business Intelligence & Data-Driven Decision Making
Analytics Strategy & Implementation
Duration:
12 Weeks
Indian School of Business
Applied Business Analytics
Starts on
Jun 13, 2024
Get Details
In a written response in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary stated, 'Inputs have been sought from major stakeholders, including Ministry of Defence, Ministry of Home Affairs, Department of Personnel & Training and from states.'
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
90s Icon: A Look at Her Today
I Am Famous
Undo
Chaudhary also informed Parliament that the appointment of the chairperson and members of the commission will be taken up once the 8th CPC is formally notified. So far, no names have been announced.
8th Pay Commission expected salary hikes
The 8th CPC is expected to affect nearly 50 lakh central government employees and about 65 lakh pensioners across India. The commission's recommendations will directly influence their monthly salaries and retirement benefits.
Live Events
According to a report by Kotak Institutional Equities quoted by NDTV, the average increase in salaries for central government employees under the upcoming 8th Central Pay Commission could be around 13%. This would be slightly below the approximately 14.3% hike granted during the 7th Pay Commission cycle.
8th Pay Commission fitment factor
The same report mentioned that the commission may suggest a fitment factor of 1.8. This figure is used to revise the basic salary, and is lower than the 2.57 multiplier adopted during the 7th CPC. While a 1.8 fitment factor implies a basic salary increase of 80%, the actual hike in take-home pay would be less because the current dearness allowance—at 55%—would reset to zero when the new structure is introduced.
There is ongoing discussion among employee representatives. Members of the National Council-Joint Consultative Machinery, which speaks for central government staff and pensioners, told NDTV Profit that they would push for a fitment factor at least equal to what was used in the 7th CPC. However, they acknowledged that a lower figure may be finalised.
8th Pay Commission expected minimum basic pay hike
If the 1.8 multiplier is accepted, the minimum basic pay may rise from Rs 18,000 to about Rs 32,000. But after adjusting for DA and other allowances already in place, the actual salary growth would come down to around 13%. For instance, the current basic salary of Rs 18,000 comes with an added Rs 9,900 as DA.
Similarly, a basic pay of Rs 50,000 may go up to Rs 90,000 under the new formula. But since Rs 50,000 already includes a DA of around Rs 27,500, the net change in pay would be smaller when other allowances are factored in.
8th Pay Commission: Dearness allowance mechanism to continue
Currently, the government revises the dearness allowance (DA) twice a year to adjust for inflation. The DA is based on the All-India Consumer Price Index for Industrial Workers (CPI-IW) and helps protect employee salaries and pensions from the effects of rising prices.
This mechanism is expected to continue even after the implementation of the 8th CPC. DA revisions usually take place in January and July every year. By the time the 8th CPC is implemented, the dearness allowance is projected to cross 60% of basic pay. It is currently revised twice a year, in January and July.
8th Pay Commission: Burden on exchequer
As per Kotak's estimates, the cost of implementing the 8th CPC may range between Rs 2.4 lakh crore and Rs 3.2 lakh crore. For comparison, the rollout of the 7th CPC cost the exchequer about Rs 1.02 lakh crore in FY2017.
The report also said the commission is expected to affect about 3.3 million central government staff. A large part of the impact would be felt by Group C employees, who form nearly 90% of the total workforce. This group may benefit more, especially due to their relatively higher spending tendencies.
8th Pay Commission: Timeline in line with earlier commissions
The government has not yet shared details on the structure or proposals of the upcoming commission. However, based on past experience, the commission is expected to follow a similar schedule as the 7th CPC. The 7th CPC was set up in February 2014 and implemented from January 1, 2016.
If the same timeline is followed, the 8th CPC may submit its report by the end of 2025, with implementation from January 2026.
Replying to a question in Parliament, Chaudhary said, 'The implementation would be taken up once the recommendations are made by the 8th CPC and are accepted by the government.'
Background on previous pay commission
The 7th Pay Commission, led by Justice A K Mathur, submitted its report in 2015. It recommended a 23.55% overall increase in salaries, allowances, and pensions. The central government implemented most of its proposals starting January 1, 2016.
The 8th CPC is expected to work on similar lines, though the current economic conditions and inflation trends could shape the final outcome. The government has begun the process by collecting feedback from departments and states, which will form the basis for setting up the commission.