Central government employees and pensioners await the 8th Pay Commission with hopes of a salary increase. Similar to the 7th Pay Commission, experts expect some allowances to be abolished or merged to simplify the pay structure. Allowances like travel allowance, special duty allowance, and small regional allowances may be affected.
The 7th Pay Commission had reviewed nearly 200 allowances, abolishing 52 and merging others to make the salary structure transparent and less complex. The 8th Pay Commission is likely to follow this path, focusing more on increasing the basic salary and Dearness Allowance (DA), while reducing smaller allowances.
Salary increments will depend on the "fitment factor", a multiplier applied to basic pay. Experts estimate this factor to be between 1.83 and 2.86, which could mean a salary hike of roughly 13% to 34%. However, the current DA of 55% is expected to reset to zero and be merged into the basic pay when the 8th Pay Commission is implemented from January 1, 2026. This means the effective increase might be moderated but still beneficial, as pensions are linked to basic pay and DA.
While the government has announced the establishment of the 8th Pay Commission in January 2025, official notification about its members and Terms of Reference (ToR) is still awaited. Given previous timelines, experts project that the commission's recommendations may be implemented by early 2028, though the raise will be counted from January 2026. Around 49 lakh central employees and 65 lakh pensioners stand to benefit from the new pay commission.
