Govt approves 8th Pay Commission:Pay revision likely from January 1; move to benefit 50 lakh Central govt employees, 69 lakh pensioners

The Union Cabinet, led by Prime Minister Narendra Modi, gives green light to terms of references of 8th Central Pay Commission.
This commission will review pay, benefits, and work conditions for central government employees. The commission will be a short-term group. It will have one Chairperson It may take until 2028 to be fully implemented. The Union Cabinet approved the commission in January, and now terms of reference and structure has been finalised. The implementation of the new pay commission will benefit more than 50 lakh central government employees and approximately 69 lakh pensioners. The basic salary of Level-1 central employees could increase from ₹18,000 to ₹44,000. The commission may implement a 2.46 fitment factor. Key Proposals How much could salary increase in 8th Pay Commission? The increase in basic salary depends on the fitment factor and DA merger. In the 7th Pay Commission, the fitment factor was 2.57. In the 8th, it could be 2.46. In every pay commission, DA starts from zero. This is because the new basic salary is already increased keeping inflation in mind. After this, DA gradually increases again. Currently DA is 55% of basic pay. With DA being removed, the increase in total salary (Basic + DA + HRA) may appear slightly less, because the 55% DA component will be removed. Example: Let’s say you are at Level 6 and your current salary as per 7th Pay Commission is: If fitment factor of 2.46 is implemented in 8th Pay Commission, the new salary will be: Why might the 8th Pay Commission take until 2028? Every Pay Commission typically takes two to three years from setup to implementation. Currently, there are 2 months remaining until 2025 ends. Even if the commission is formed soon, it will take time to prepare the report, get government approval and finalize everything. Looking at previous commissions, this same pattern is visible. Full implementation by 2028 does not mean that its benefits will only be available from 2028. Pay commissions come every 10 years. The 7th was implemented in 2016, so the ‘effective date’ of the 8th is set from January 1, 2026. This means salary and pension increases will be counted from this date.