This major change will be implemented starting January 1, 2026, benefiting millions of employees across the country.
8th Pay Commission: The Union Cabinet has approved the constitution of the 8th Pay Commission, paving the way for a significant salary hike for central government employees. The new pay structure is expected to come into effect from January 1, 2026, increasing the minimum basic salary to over ?40,000 per month, up from the current ?18,000 per month.
Beneficiaries:
According to estimates, the fitment factor under the 8th Pay Commission is expected to range between 2.6 and 2.85, potentially increasing salaries by 25-30%. This hike will also include benefits like perks, allowances, and performance pay. The projected increase marks a significant improvement compared to the 7th Pay Commission, which applied a fitment factor of 2.57 and raised salaries by an average of 23.55% in 2016.
Neeti Sharma, CEO of TeamLease Digital, commented, "The basic minimum salary is expected to rise beyond ?40,000, with corresponding increases in pensions and other benefits."
7th Pay Commission (2016):
6th Pay Commission (2006):
Union Information and Broadcasting Minister Ashwini Vaishnaw highlighted the importance of timely preparation for the 8th Pay Commission. ¡°The last Pay Commission began in 2016, and its term will conclude in 2026. Establishing the 8th Pay Commission in 2025 ensures sufficient time for its recommendations to be implemented by January 1, 2026,¡± he said.
The chairman and two members of the 8th Pay Commission will be appointed soon, ensuring that the process begins well in advance of the deadline.
The 8th Pay Commission is expected to address key economic challenges, including inflation and rising living costs. Sharma explained, "These revisions are essential to narrow the gap between public and private sector remuneration. They will also enhance disposable income, boosting consumption and contributing positively to the economy."
Chief Economist of ICRA Ltd, Aditi Nayar, noted, ¡°While the award related to the 8th Pay Commission is unlikely to affect fiscal metrics in FY 2026, its potential impact must be factored into the new medium-term fiscal consolidation path and the Finance Commission¡¯s recommendations.¡±
The implementation of the 7th Pay Commission in 2016 resulted in an additional expenditure of ?1 lakh crore for the financial year 2016-17. The 8th Pay Commission is expected to have a similar fiscal impact, underscoring its importance in the country¡¯s economic planning.
The 8th Pay Commission is more than just a salary update. It shows the government¡¯s promise to create a fair system for its workers. By focusing on changing economic needs, it aims to support employees financially and reduce the difference between public and private sector pay.
1. What is the 8th Pay Commission?
Answer: The 8th Pay Commission is a government panel set to revise salaries, pensions, and allowances for central government employees and pensioners.
2. When was the 8th Pay Commission approved?
Answer: It was approved on January 16, 2025.
3. Who will benefit from the 8th Pay Commission?
Answer: Around 50 lakh employees and 65 lakh pensioners, including defence and Delhi government employees, will benefit.
4. What is the expected salary hike under the 8th Pay Commission?
Answer: The minimum basic salary is likely to rise from ?18,000 to over ?40,000 per month, with a 25-30% hike.
5. When will the 8th Pay Commission be implemented?
Answer: The new salary structure will start on January 1, 2026.
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