8th Pay Commission: The 8th Central Pay Commission is set to alter the salaries and pensions for over 5 million central government workers and around 6.9 million pensioners. However, the final decisions on when it will be implemented and the possible costs to the government are still pending. This time, salary and pension hikes will be based on the fitment factor.
This factor acts as a multiplier for the current basic salary and basic pension. A higher fitment factor means a bigger increase.Recommendations may come in 18 monthsMinister of State for Finance Pankaj Chaudhary told the Lok Sabha that the 8th Pay Commission was established on November 3, 2025. Justice Ranjan Prabha Desai is leading it as chairperson. Professor Pulak Ghosh has been appointed as a part-time member, and Pankaj Jain serves as the member-secretary.
The government anticipates that the Pay Commission will provide its recommendations within 18 months. The current 7th Pay Commission’s term wraps up on December 31, 2025. It is expected that the new salary and pension rates will kick in from January 1, 2026.
How much arrears will the employees get?
Employees and pensioners should expect to receive their arrears once the recommendations are approved. However, considering the government’s procedures, it might take one to two years for implementation. If the 8th Pay Commission’s recommendations are put into effect in January 2028 but are backdated to January 2026, employees will receive arrears for the entire 24 months.Now, let’s say an employee with the minimum basic pay gets an average salary bump of Rs 11,900 each month.
The total arrears over 24 months would be around Rs 2.85 lakh. This means that even a beginner employee is expected to get arrears of about Rs 2.8 to Rs 3 lakh, while those in higher salary brackets could see this amount increase significantly.The government’s position on DA and DR is straightforward.The Finance Ministry has made it clear that there are no current plans to combine dearness allowance (DA) and dearness relief (DR) into the basic pay. This has effectively ended the ongoing debates on social media and among employee unions.
DA and DR will keep increasing every six months as usual and will still be calculated based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).What happens if the fitment factor is set at 2.15?If the fitment factor is around 2.15, the basic salary could more than double. This change would also directly affect HRA, pensions, and other allowances since they are all tied to the basic pay. According to current discussions at the policy level, the 8th Pay Commission’s recommendations might be put into action in the financial year 2028. If that happens, arrears could be paid from January 1, 2026, until the implementation, which could span roughly five quarters.
What will be the financial impact on the government?
Experts predict that the total cost of the Pay Commission, when combined with the Centre and states, could surpass Rs 4 lakh crore. If arrears are factored in, this amount could soar to Rs 9 lakh crore. The government has assured that it will make the necessary budgetary provisions to implement these recommendations while keeping financial stability and providing relief to employees.