The Central Government has initiated the formation of the 8th Pay Commission, setting the stage for a major revision in the basic salary, allowances, and pension structure of over 50 lakh government employees and 65 lakh pensioners across India. If implemented as scheduled, the new pay matrix will come into effect from January 1, 2026, replacing the 7th Pay Commission framework that has been in place since 2016.
The Ministry of Finance has begun consultations with key departments including Defence, Home Affairs, and Personnel & Training to finalize the Terms of Reference (ToR). Employee associations, including the Government Employees National Confederation (GENC), have been pressing for swift implementation and restoration of the Old Pension Scheme (OPS).
Key Changes Expected
- Minimum Basic Pay: Likely to increase from ₹18,000 to ₹26,000
- Fitment Factor: Projected between 2.0 and 2.5, resulting in a 30–40% salary hike
- DA Merger: Dearness Allowance (currently 55%) may be merged with basic pay, resetting DA to zero
- Revised Allowances: House Rent Allowance (HRA), Travel Allowance (TA), and other perks to be recalibrated
- Pension Boost: Enhanced retirement benefits for 65 lakh pensioners to align with inflation and living costs
Implementation Timeline
While the commission has been approved in principle, experts caution that actual rollout may be delayed to late 2026 or early 2027, depending on the pace of report submission and cabinet approval.