The central government is going to constitute the 8th Pay Commission to determine the new pay scale and pension amount for its nearly 1 crore employees and pensioners. Brokerage firm Ambit Capital has indicated in a report how much increase in salary and pension the 8th Pay Commission may recommend.
8th Pay Commission Latest Updates: January 2026… Lakhs of government employees are eyeing this date when the term of the 7th Pay Commission will end and the timeline of the 8th Pay Commission will begin. The 7th Pay Commission did not make a big increase in the salary, due to which there are more expectations from the 8th Pay Commission. According to a report by the Economic Times, the recommendations of the 8th Pay Commission can pave the way for a salary and pension increase of 30-34%. This will directly benefit about 1 crore employees and pensioners. But will this gift be available on time?
The purpose of setting up the pay commission
A pay commission is formed every ten years to keep government salaries competitive with the private sector. This not only provides financial strength to the employees but also helps in retaining qualified talent in the administrative system. This time the 8th Pay Commission was announced in January 2024, but its terms and conditions (ToR), members and chairman have not been decided yet. Obviously, there is a danger of delay.
There was less salary increase in the 7th Pay Commission
The 7th Pay Commission, which came into effect in 2016, recommended a mere 14.3% increase in the Basic Pay, which was the lowest increase since 1970. Although the fitment factor was 2.57, the actual pay increase was limited due to the reset of DA. The total increase including various allowances was about 23%. Earlier, the 6th Pay Commission (2006) had given a massive increase of about 54%, which had created a lot of enthusiasm among the working class.
What will be the fitment factor in the 8th pay commission?
Fitment Factor is the multiplier through which the increase in basic salary is decided. In the 7th Pay Commission, it was 2.57. A report by brokerage firm Ambit Capital suggests that this time it can be between 1.83 to 2.46. That is, if the current basic salary of an employee is ₹ 18,000, then the new salary can be up to ₹ 44,280 if the fitment factor is 2.46 . However, the actual benefit will come out gradually after the DA is reset.
Salary structure includes many allowances along with basic pay
Government salary includes not only basic pay but also DA (dearness allowance), HRA (house rent allowance), TA (travel allowance) and other benefits. Over time, the proportion of basic has decreased from 65% to about 50%. The share of allowances in the total salary has increased. DA is revised every 6 months based on CPI. Therefore, the impact of salary increase becomes more pronounced over time.
50% pension guaranteed in UPS
The recommendations of the 8th Pay Commission will also have a direct impact on more than 60 lakh pensioners. Since HRA and TA are not included in the pension, only basic pay and DA will change. Another major change is that from April 2025, the Unified Pension Scheme (UPS) has been implemented by amending the NPS, under which the employee is guaranteed to get at least 50% of his last salary as pension.
January 2026 deadline: Reality or just hope?
The 7th Pay Commission was announced in February 2014 and implemented in January 2016. That is, it took 2 years of preparation. But the 8th Pay Commission has not been formed till July 2025. According to experts, if the 8th Pay Commission is formed by the end of this year, then the report, review, cabinet approval and implementation of the recommendations may take 18 to 24 months. In such a situation, the deadline of January 2026 has become impossible.
Thousands of crores of rupees extra expenditure due to implementation of 8th Pay Commission
Any decision related to the Pay Commission is not just economic for the government, but also political. On one hand, there are expectations of the employees, on the other hand, there is budget deficit, populist schemes and huge expenditure from the government treasury on election promises. A salary hike of more than 30% will put an additional burden of thousands of crores on the government treasury. Probably for this reason, the government is taking steps very carefully.
Both hope and patience are necessary for central employees and pensioners
The 8th Pay Commission is a new ray of hope for lakhs of employees and pensioners. But as history is a witness, such decisions are not taken in haste. Employees will still have to be patient. The good news may be delayed, but it will definitely come. And when it comes, it will bring relief as well as new energy in life.
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