Central government employees and pensioners expecting salary increases from the newly established 8th Pay Commission will have to wait until at least the financial year 2027. This delay is due to procedural requirements and the lack of budget provisions for the necessary changes in the upcoming fiscal year.
On January 16, 2025, Union Minister Ashwini Vaishnaw announced that the Union Cabinet, under Prime Minister Narendra Modi, had approved the creation of the 8th Pay Commission. However, he did not provide any details regarding when its chairperson and members would be appointed.
The 8th Pay Commission is set to revise salaries and pensions for over 50 lakh government employees and 65 lakh pensioners. Unfortunately, the budget for 2025-26 does not include any funds for implementing these changes, as the commission’s report is not expected to be ready before March 2026, according to a senior official from the Finance Ministry.
Reports indicate that the Finance Ministry is still working on defining the commission’s scope in collaboration with various ministries, including Defence, Home Affairs, and Personnel. Consequently, the commission can only begin its work once these guidelines are finalized, which is anticipated to happen no earlier than March 2026.
Even if the report is approved in FY27, any benefits retroactive from January to March 2026 will be included in the FY27 budget, meaning those costs will carry over into the fiscal year 2026-27.
What is the 8th Pay Commission?
The Union Cabinet approved the formation of the 8th Pay Commission on January 16, 2025. It is expected to propose a “fitment factor” of 2.86 times, which will be used to calculate revised salaries.
Under the current 7th Pay Commission, central government employees could see their pay increase by up to 2.57 times. This change could raise the minimum basic salary from ₹18,000 to ₹51,480 and pensions from ₹9,000 to ₹25,740. Higher-ranking officials, such as entry-level IAS officers, may see their salaries rise to ₹1.6 lakh per month.
Why No Interim Relief?
The government has not announced a Dearness Allowance (DA) increase for 2024, which has led to speculation regarding the 8th Pay Commission. However, officials clarify that adjustments in DA (which are linked to inflation) are separate from revisions made by pay commissions.
Historical Context of Pay Commissions
Pay commissions are established approximately every decade to ensure that salaries align with economic conditions. The previous 7th Pay Commission was implemented in 2016 at an annual cost of ₹1.02 lakh crore for the government. While it remains uncertain what financial impact the 8th Commission will have, officials stress that its recommendations will only take effect after FY27.
The approval of the 8th Pay Commission, central government employees face a wait of about two years due to bureaucratic processes and financial planning. The earliest they can expect revised salaries or pensions is April 2026, with any back payments likely extending into FY27. For now, attention is focused on finalizing the commission’s framework and awaiting its report.
