8th Pay Commission: Salary and Pension Hike Likely, But Delays Push Implementation Beyond 2026
8th Pay Commission: The 8th Central Pay Commission (CPC) is expected to bring a significant hike in salaries and pensions for central government employees and retirees.
However, despite growing anticipation, there is still no official notification regarding its constitution or implementation timeline.
Meanwhile, Ambit Capital predicts a 30-34% rise in salaries and pensions, which would benefit around 4.4 million employees and 6.8 million pensioners. The fitment factor, likely to be between 1.83 and 2.46, will play a decisive role in fixing revised pay scales and allowances such as Dearness Allowance (DA), House Rent Allowance (HRA), and Transport Allowance (TA).
8th Pay Commission: Why Expectations Are High
The last revision under the 7th Pay Commission, implemented in 2016, provided only a 14% hike, which many considered modest compared to rising inflation and living costs. With nearly a decade since the last major revision, employees
Possible Benefits
- According to early reports, the minimum basic pay may rise from ₹18,000 to as high as ₹51,480.
- A new health insurance scheme could replace the current Central Government Health Scheme (CGHS), offering broader and improved medical coverage.
Current Status
The commission has not yet been formally constituted. The appointments of the Chairman, members, and finalisation of the Terms of Reference (ToR) are pending, leading to delays.
8th Pay Commission: Expert Insights
- A Kotak Institutional Equities report suggests implementation may not occur before late 2026 or early 2027. Once formed, previous commissions have taken about 1.5 years to submit reports, with an additional 3-9 months required for Cabinet approval and rollout.
- Kotak forecasts a minimum basic pay of ₹30,000 per month, with a fitment factor of around 1.8, translating to a real pay hike of approximately 13%.
- An Ambit Capital estimate indicates that salaries and pensions could rise by 30-34%, directly benefiting 4.4 million employees and 6.8 million pensioners. The fitment factor is expected to range between 1.83 and 2.46, impacting allowances like DA, HRA, and TA.
Background
8th Pay Commission: The 7th Pay Commission was implemented in 2016 and delivered a modest 14% hike. With inflation and rising costs of living, expectations from the 8th CPC are considerably higher.
For now, central employees and pensioners may need to wait at least another year and a half before clarity emerges.
