8th Pay Commission in Motion: What’s Changing, Who Gains, and How Much?

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The government has initiated consultation for setting up the 8th Central Pay Commission (CPC), which will refix salaries, pensions, and allowances of almost 50 lakh government employees and 65 lakh pensioners. The commission's proposals are expected to take effect from January 1, 2026.

Key Highlights:

Ministry of Finance is seeking views of Defence, Home Affairs, Personnel & Training, and state governments
Members and chairperson will be appointed once the commission has been officially notified
Estimated average annual salary rise: 13 percent, which is lower than 14.3 percent during the 7th CPC
Recommended fitment factor: 1.8 (lower than 2.57 used in the previous cycle)

Salary Projections:

Minimum basic pay may go up to Rs 32,000 from Rs 18,000
Rs 50,000 minimum pay will go up to Rs 90,000, though net hike will be moderated due to DA resetting
Dearness Allowance (DA), currently standing at 55 percent, will be zero under the new format

Fiscal Impact & Timeline:

Rough estimate for implementation: Rs 2.4–3.2 lakh crore
To be released by end of 2025, effective from January 2026
DA revision to continue every two months, as per CPIIW

Prospects

While the fitment factor is lower than expected, setting up the commission is a good step towards income realignment and inflation protection for civil servants.

Source: Economic Times, NDTV, India Today, MSN News