8th Pay Commission: When will govt employees and pensioners receive the hike? Details here
The recommendations of the 8th Pay Commission are expected to be submitted by the end of 2025, while it is scheduled to come into effect from January 2026 onwards, according to a report by Ambit Institutional Equities. However, the actual rollout will depend on the completion of the report, its submission to the government, and the approval of its recommendations.
Following the approval, the recommendations of the 8th Pay Commission are expected to be implemented in FY27 and are likely to increase government salaries and pensions by 30-34%, the report said.
The 30-34% hike in salaries and pensions, estimated to cost the government an additional Rs1.8 lakh crore, the report stated. Notably, Salaries, pensions, and allowances are adjusted through pay commissions using the fitment factor. This important multiplier decides the salaries and pensions of government employees, taking into account factors like inflation, employee requirements, and the government's financial capacity.
The recommendations of the 8th Pay Commission will directly benefit approximately 44 lakh central government employees across various ministries and departments, along with 68 lakh pensioners, totalling up to more than a crore direct beneficiaries. Notably, the 4.4 million central government employees and armed forces personnel represent 0.7% of India's 60 crore labour force, and nearly 9% of the formal sector, the report said.
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Time of India
an hour ago
- Time of India
8th Pay Commission: What could be the expected salary hike, fitment factor, and implementation date? Here's what a new report says
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The government has announced the commission in January 2025 but is yet to finalise the Terms of Reference (ToR) or appoint its estimates that the minimum salary could rise from ₹18,000 to about ₹30,000, reflecting a fitment factor of around 1.8. This would lead to a real increase of nearly 13% in pay for central government employees affected by the revision. A total of around 3.3 million central employees, mostly from Grade C category, are likely to benefit the most. Grade C workers make up nearly 90% of the central government timeline for the 8th CPC is expected to follow the pattern of previous commissions. The 6th and 7th CPCs took around 1.5 years to complete their reports. After that, the government took another 3 to 9 months to implement the recommendations post Cabinet approval. Kotak said, "The 8th CPC is unlikely to be implemented before late 2026 or early 2027."The estimated financial burden of the new pay commission could range between ₹2.4 lakh crore and ₹3.2 lakh crore, or about 0.6–0.8% of India's GDP. While this could add pressure to the fiscal budget, past pay revisions have shown temporary positive effects on the noted that the pay hike may give a brief push to consumption and savings. 'We expect the 8th CPC to provide a temporary boost to consumption and savings,' the firm said. The impact is expected to be visible in sectors like automobiles and consumer staples. However, such gains have typically been firm also said that the revised pay structure may encourage more savings in both physical and financial assets such as equities and bank deposits. Kotak estimates that the pay revision could lead to incremental savings of ₹1–1.5 lakh last major revision, the 7th CPC, combined with the One Rank One Pension scheme, added about two percentage points to India's GDP growth in FY17. While similar growth is not guaranteed this time, Kotak believes the overall economic impact will still be significant, particularly in the short government has not shared further updates on the 8th CPC beyond its announcement in January 2025. Until the ToR and commission members are finalised, the process remains in its early per a report last week, the Ministry of Finance has started holding early consultations with major stakeholders to set up the 8th Central Pay Commission. These talks include departments such as Defence, Home Affairs, and Personnel and Training, along with state governments. These discussions are intended to collect feedback ahead of the official notification of the a written reply in Parliament, Minister of State for Finance Pankaj Chaudhary said, 'Inputs have been sought from major stakeholders, including Ministry of Defence, Ministry of Home Affairs, Department of Personnel & Training and from states.'Chaudhary also told the Lok Sabha that the appointment of the chairperson and other commission members will take place once the 8th CPC is formally constituted. No appointments have been made so upcoming CPC may propose a fitment factor of 1.8 for salary revision. This would be lower than the 2.57 factor adopted in the 7th Pay Commission. 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By the time the new pay structure is introduced, the DA is projected to exceed 60% of the existing basic 7th Pay Commission, headed by Justice A K Mathur, recommended an overall rise of 23.55% in salaries, pensions, and allowances. The government approved most of the proposals with effect from January 1, 2016. The structure and impact of the 8th CPC are likely to be shaped by current economic conditions and inflation, but will follow broadly the same process, beginning with the collection of inputs from relevant departments and states.
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