8th Pay Commission News: What We Know So Far

• 26 Dec 2025
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The 8th Central Payment Commission is anticipated to revise pay as well as pensions for approximately 50 lakh individuals who are working as central government employees and about 69 pensioners, respectively. With that being said, the implementation date and funding details are yet to be finalized. The hikes will be determined by 8th CPC on the basis of the fitment factor, a multiplier that influences basic salaries as well as the pensions. 

Recently, the Union Minister of State for Finance, Shri. Pankaj Chaudhary, mentioned that the 8th CPC was constituted on 3 November 2025, with Justice Ranjan Prabha Desai as the Commission’s Chairperson, Prof Pulak Ghosh as the Part-time Member and Pankaj Jain as the Member-Secretary. 

The commission is expected to submit its recommendations within a period of 18 months. Although the tenure of the 7th Pay Commission shall come to an end on 31 December 2025, the revised payouts are likely to become applicable from 1 January 2026 onwards.

Government employees and pensioners are anticipated to receive arrears once the recommendations are approved, though implementation may take up to a period of two years. A much-needed clarification from the Finance Ministry has confirmed that there is currently no proposal to merge Dearness Allowance (DA) or Dearness Relief (DR) with basic pay.

This clarification puts an end to speculation circulating on social media and among employee unions. DA and DR will continue to increase every six months based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). 

The fitment factor will determine the extent of increases in salary as well as pensions. A fitment factor of 2.15, for example, could more than double the basic salary and significantly boost allowances such as House Rent Allowance, pensions and other benefits calculated based on the basic pay.

As per the policy discussions, the 8th CPC recommendations’ implementation could take place in fiscal year 2028. The arrears could cover up to five quarters starting from 1 January 2026.

Experts have noted the potential fiscal impact and estimated that the total cost for both central and state governments could exceed Rs. 4 lakh crore. If arrears are included, this amount may rise to approximately Rs. 9 lakh crore. 

The government has assured that sufficient budgetary provisions will be made to implement the commission’s recommendations once they are finalized. This will help ensure that there is a balance between employee benefits and fiscal responsibility.

Source: CNBCTV18