8th Pay Commission Latest News: How much salary hike can 1+ crore central government employees, pensioners expect? Check calculation and more

8th Pay Commission Latest News

8th Pay Commission Latest News: The Narendra Modi Cabinet on Thursday approved plans to set up the 8th Pay Commission. This decision, which will impact over 50 lakh central government employees and 65 lakh pensioners, will take effect from FY 2026-27. Announced during the Cabinet briefing in New Delhi by Union I&B Minister Ashwini Vaishnaw, the move is expected to result in a pay hike of up to 20 percent for senior staff and around 25 percent for workers up to level five. Prime Minister Narendra Modi called the setting up of 8th Pay Commission as a crucial step that ‘will improve quality of life and give a boost to consumption.’

Read More: Pay commissions have had their impact on finances with double-digit growth in wage bill

The development comes weeks after the central government's dearness allowance (DA) component breached the 50-percent threshold in their salary structure. As per the revisions announced by the Centre, since July last year, central government employees have been receiving as much as 53% of their basic salary as DA. Pensioners have also been receiving a 53% component as dearness relief.

Discussing the calculation of salaries under the 8th Pay Commission, Rohitaashv Sinha, a partner at King Stubb & Kasiva law firm, stated that the hike under the new commission is likely to be a staggering 186 percent. He explained that with a fitment factor of 2.86 under the 8th Pay Commission, the minimum basic pay could increase to Rs 51,480 per month. Regarding the implementation of the 8th Pay Commission, Sinha told ET that the government is likely to introduce changes through the Central Civil Services (Revised Pay) Rules, 2025.

Meanwhile, speaking to Moneycontrol, EY India Chief Policy Advisor DK Srivastava emphasized the need for a new fitment factor due to CPI inflation, among other factors. Srivastava also mentioned that the 8th Pay Commission will have a multiplier effect in areas such as consumption. However, he noted that it could also pose a challenge for the Centre in maintaining fiscal discipline.

Since India's independence in 1947, the country has seen seven Pay Commissions. These commissions assist the Union government in assessing and implementing necessary adjustments to the salary and pension structure for its staff. The last Pay Commission, the 7th Pay Commission, came into effect in 2016.