New Delhi: The government officially initiated the process for the 8th Pay Commission, with the Cabinet approving its Terms of Reference (ToR). This move sets the stage for determining the future structure of salaries, allowances, and pensions for central government employees and pensioners. The announcement brings relief to the millions of employees who have been waiting for long-pending pay revisions.

The implementation of the 8th Pay Commission is expected to directly benefit around 50 lakh central government employees and 65 lakh pensioners across the country. The government has given the commission a deadline of 18 months to submit its report, which means the new salaries and pension rates could come into effect from January 1, 2026. While the payment may start slightly later, employees and pensioners will receive full arrears for the intervening months.

Expected salary and pension hikes

While the government has not released official figures yet, analysts expect a 30-34% increase in salaries and pensions, based on the trends of previous pay commissions. The fitment factor, which was 2.57 in the 7th Pay Commission, is likely to rise to 2.86 or more this time. For instance, a central government employee with a basic salary of Rs 2,000 could see it rise to approximately Rs 71,500.

Impact on allowances and pensioners

Along with higher basic pay, the Dearness Allowance (DA) for employees and Dearness Relief (DR) for pensioners will automatically increase. This means both employees and pensioners will benefit from protection against rising inflation. The revised salaries and pension rates will have a retrospective effect from January 1, 2026, ensuring no loss to employees and pensioners for the intervening period.

Additional demands from employee groups

Employee unions have requested the government to consider other key issues, such as reducing the pension commutation period from 15 years to 12 years, increasing medical allowance from Rs 3,000 to Rs 20,000, and making CGHS facilities more accessible.

However, the All India Defence Employees Federation (AIDEF) has raised concerns that 65 lakh pensioners have been excluded from the 8th Pay Commission’s ToR. The organisation claims that pension revision has not been explicitly mentioned this time, and the government has not yet responded to these concerns.