8th Pay Commission Update – Central government employees initially expected the recommendations of the 8th Pay Commission to be implemented from January 1, 2026, but this will not happen. The government has formed a new pay commission and announced the names of the committee members, but the delay is due to the 18 months required to prepare the review report.
The government will need 18 months to prepare the review report. This means the government may implement its recommendations at the end of 2027 or the beginning of 2028. Upon implementation, there is a strong possibility of a significant increase in the salaries of central government employees and pensioners. Employees waited in 2025, but did not receive the expected benefits.
What relief was provided?
While there was a setback in 2025, there were also some benefits. The biggest relief for employees came regarding pensions. Several media reports claiming the discontinuation of Dearness Relief (DR) or future cuts had caused considerable anxiety among employees and pensioners. However, the government clarified that the pension system would remain secure.
Any changes will be made according to the established procedures. This announcement brought significant relief to pensioners. Several changes were also made to the rules related to the National Pension System (NPS). The limit for withdrawing NPS funds upon an employee’s retirement was increased to Rs. 8 lakh. This limit was previously Rs. 5 lakh. A new option was also provided for those with a corpus between Rs. 8 and 12 lakh.
Some relief on inflation
The Modi government provided some relief to central government employees on the inflation front. Although a new salary structure was not implemented in 2025, the Dearness Allowance (DA) continued to provide support. A 2 per cent increase in March resulted in a total DA increase of per cent for the entire year.
For many employees, this was the only regular increment. This helped mitigate some of the effects of rising inflation. This increase provided some relief in food, rent, and daily expenses.
Several major reforms were implemen..ted.
The year 2025 was also a year of reforms. Emphasis was placedigitalisationation and simplifying service rules. Many tasks related to pensions, leave, transfers, and grievances have been moved online. This has reduced the need for physical files. The government has also clarified that allowances and service conditions will be reviewed, and that certain aspects will remain unchanged.