8th Pay Commission Update: Preparations for Salary and Pension Hike

8th Pay Commission: The 8th Central Pay Commission (CPC) has officially launched its website and is seeking suggestions and feedback from various stakeholders. This indicates that the Commission has begun its work. Although it may take several months to prepare the final recommendations, central government employees and pensioners want the new recommendations to be implemented soon. It is expected that employees’ salaries and pensions will increase after the Commission’s approval.

However, it is unclear whether the 8th Pay Commission will determine salaries based on the fitment factor, like the 7th Pay Commission, or adopt a new method. If the fitment factor is applied as before, 60 percent dearness allowance (DA) may form the basis for calculating the new salary.

Latest Update on Dearness Allowance (DA)

The All India CPI-IW index recorded 148.2 in December 2025. Based on this, it is estimated that the dearness allowance (DA) for the period January to June 2026 may increase by 2 percent. This will bring the total DA under the 7th Pay Commission to approximately 60.34 percent. This increase is expected to receive approval from the Union Cabinet by March 2026. According to reports, the 7th Pay Commission determined the fitment factor based on the DA rate as of January 1, 2016.

How the Fitment Factor was Determined in the 7th Pay Commission

The 7th Pay Commission, effective January 1, 2016, determined the new pay by adding the then-current dearness allowance to the basic pay. The starting salary for the first level was set at ₹18,000, compared to ₹7,000 under the 6th Pay Commission. This means the new pay increased by approximately 2.57 times, and this fitment factor was applied equally to all employees.

Possible Fitment Factor for the 8th Pay Commission

At the beginning of the 7th Pay Commission, an employee’s basic salary was 100. Due to the increasing DA over the past ten years, this could increase to approximately 160. Based on this, the minimum fitment factor for the 8th Pay Commission can be assumed to be 1.60.

However, other factors could also increase this figure. During the COVID-19 pandemic, three DA installments were withheld for 18 months in 2020-21, which were not compensated. If they had been implemented on time, the current DA would have exceeded 60 percent. This is why employee organizations are demanding a higher fitment factor.

Implementation May Take Time

Even though the 8th Pay Commission is scheduled to be effective from January 2026, its immediate implementation does not seem feasible. Based on past processes, it could take approximately two years for the final recommendations to be approved. Further DA increases are likely during this period.