8th Pay Commission effective from January 1: What to expect
What's the story
The Union Cabinet has approved the implementation of the 8th Pay Commission from January 1, 2026. The new pay commission will revise pensions, allowances, and salaries of serving and retired central government employees. Along with salary hikes, it will also revise the Dearness Allowance (DA) to account for inflation. The exact percentage of hikes under this commission is yet to be revealed by the government.
Salary projection
Estimated salary increase under the 8th Pay Commission
Media reports suggest that the basic salary of a central government employee could increase from ₹18,000 to ₹51,480 under the 8th Pay Commission. This estimate is based on the fitment factor, a method used by the government to revise salaries. The commission will also consider inflation trends and real wage erosion while determining these hikes.
Factor influence
Fitment factor and its impact on salaries
The fitment factor, which is determined in relation to a country's economic inflation, is likely to be as high as 2.57 under the 8th Pay Commission. This could lead to an increase in salaries and pensions for nearly one crore employees and retirees. "While the government has not declared an official number yet, early expectations place the 8th Pay Commission fitment factor in the range of 1.83 to 2.57," CA Chandni Anandan, Tax Expert at Clear Tax told Mint.
Benefit assurance
8th Pay Commission's stance on post-retirement benefits
The Indian government has also clarified that post-retirement benefits such as DA hikes and Pay Commission revisions will only be stopped if an employee is "dismissed for misconduct." This was in response to a false claim that central government pensioners would stop receiving DA hikes under the new Finance Act 2025. The government amended Rule 37 of the CCS (Pension) Rules, 2021 to reflect this clarification.