8th Pay Commission Update 2026: Discussions about the 8th Pay Commission are now at their peak among central employees. According to the latest data as of February 4, 2026, the Consumer Price Index for December 2025 stood at 148.2, confirming a 2% increase in dearness allowance from January 2026.
With this, the total DA has now reached 60%, laying a strong foundation for the fitment factor of the new Pay Commission. In Budget 2026, the government allocated ₹23.42 crore for the Commission’s formation and administrative work, signalling that work on the new pay structure has officially begun.
60% Dearness Allowance and Fitment Factor
A basic rule for calculating the Pay Commission is that whenever a new pay structure is implemented, the previous dearness allowance is incorporated into the basic pay. Since DA has currently reached 60%, the fitment factor of the 8th Pay Commission cannot be less than 1.60 under any circumstances.
Mathematically, if an employee’s basic salary is ₹100 and they receive 60% DA, their current income is ₹160. If the fitment factor is set lower than 1.60, the employee’s take-home salary will be reduced, which is against the rules. Therefore, 1.60 is the minimum threshold from which the fitment factor calculation will begin.
What will be the final fitment factor
Although 1.60 is a mathematical basis, employee unions and experts are demanding a much higher fitment factor. Organizations like the Federation of National Postal Organizations have proposed a fitment factor ranging from 3.00 to 3.25 to the government. They argue that the government should be generous this time to compensate for the 18 months of DA arrears withheld during 2020-21.
Even if the government adopts the 7th Pay Commission’s 2.57 formula, the minimum wage will still see a significant increase. Some economic analysts estimate that the government may keep the fitment factor between 1.92 and 2.15 to maintain a balanced fiscal situation.
Impact on Salaries and Pensions
The determination of the fitment factor will directly impact the pockets of the country’s 5 million employees and over 6.5 million pensioners. If the government sets a fitment factor of 2.50, the current minimum basic salary of ₹18,000 could increase to ₹45,000.
Similarly, the minimum pension for pensioners, currently ₹9,000, could increase to between ₹22,000 and ₹25,000 based on the fitment factor. Furthermore, employee organizations are demanding an increase in the annual increment rate from the current 3% to 5% to reduce the pay gap with the private sector.
Waiting for Arrears
The 8th Pay Commission is technically considered effective from January 1, 2026, but its recommendations may take some time to be implemented. Based on experience, the Commission takes approximately 18 to 24 months to prepare its detailed report. However, employees need not panic because, even if the announcement is made in 2027, the arrears will be considered effective from the previous date, January 1, 2026.
In this case, employees will receive the increased salary as a lump sum arrears, which could be a substantial amount depending on the pay level. At present, all eyes are on the big meeting of employee organizations to be held on 15 February 2026, where the final draft to be submitted to the government will be finalized.
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