8th Pay Commission Raises Hopes Of A Record Pay Hike For Govt Employees, Pensioners

The new minimum basic salary for employees is expected to be ₹32,400, compared to the current minimum basic pay for Central government employees of ₹18,000 under the 7th CPC.

The Union Cabinet had recently approved the Terms of Reference of the 8th CPC. The recommendations made by the commission will cover nearly 50 Lakh Central Government employees, including Defence Services Personnel, and almost 69 lakh pensioners. Considering experts' predictions, the approved fitment factor under the 8th Pay Commission could be between 1.8 and 2.86

Estimated Cost Of Implementing 8th CPC

Sources stated that the combined cost of increased salaries and pensions under the 8th CPC could cross ₹4 lakh crore. With arrears for nearly five quarters — similar to previous pay cycles — the overall financial burden may approach ₹9 lakh crore, making it one of the costliest pay revisions to date.

The Central government will need to balance this additional expenditure with its fiscal stability goals, sources added.

Salary Structure

Central Government employees and pensioners are currently paid under the 7th Pay Commission. Currently, the minimum basic pay for central government employees is Rs 18,000, while pensioners receive a minimum basic pension of ₹9,000. Meanwhile, the maximum basic salary under the 7th Pay Commission is ₹2,25,000, while apex positions like the Cabinet Secretary and others receive  ₹2,50,000 per month. Under 7 CPC, fitment was set at 2.57. Moreover, the DA/DR currently stands at 58%.

A senior government official stated that, at a minimum basic salary of  ₹18,000, a 3 % DA hike will add  ₹540. This is expected to take the total minimum salary under the 7th Pay Commission to  ₹28,440 at 58% DA. Similarly, a 3% DR hike will raise the  ₹9,000 minimum basic pension by  ₹270, bringing the total minimum pension to ₹14,220 at a 58% rate.

Experts have predicted that the approved fitment factor under the 8th Pay Commission could be between 1.8 and 2.86. At the fitment factor of 1.8 new minimum basic salary for employees is expected to be  ₹32,400, and the new minimum basic pension for pensioners could be at  ₹16,200.
While at the fitment factor of 2.86 new minimum basic salary for employees is expected to be ₹51,480, and the new minimum basic pension for pensioners is expected to be ₹25,740. The experts pointed out that DA/DR would be reset to zero once the 8th Pay Commission is implemented.

How Is It Determined? 

The basic formula for calculating revised salary based on a fitment factor is -- Revised Salary = Basic Pay × Fitment Factor. The fitment factor is a metric used by the government to determine the salaries and pensions of its employees and pensioners. Sources stated that several factors including the nutritional requirements of an average worker, cost of food, clothing, and housing, are also taken into account in the calculation. 

No DA-Basic Pay Merger

Days after several employees' associations requested the Narendra Modi government to merge dearness allowance (DA) with the basic pay, Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha that there is no such proposal under consideration with the government at present.

The government's statement came in response to a query by Member of Parliament Anand Bhadauria. “No proposal regarding the merger of the existing DA with the basic pay is under consideration with the government at present,” Chaudhary said.

Pay Commissions

The formation of the 8th CPC was first announced in January 2025, and its ToR was approved by the Union Cabinet in October 2025.  

The commission has been mandated to submit its recommendations within 18 months of its constitution. The recommendations are expected to impact around 50 lakh Central government employees and 69 lakh pensioners.

The 8th Central Pay Commission will function as a temporary body, consisting of a Chairperson, one Part-Time Member and a Member-Secretary. 

Former Judge of the Supreme Court of India Justice Ranjana Prakash Desai has been appointed as the Chairperson of 8th CPC. Meanwhile, Pulak Ghosh, Professor, IIM Bangalore has been appointed Part-Time Member of the new Pay Commission. The Government has appointed Pankaj Jain, Secretary, Petroleum & Natural Gas Ministry as the Member-Secretary of the Pay Commission.

The pay commission is typically constituted once every 10 years to review and recommend changes in the salary structure, allowances, and pensions of government employees.

The 7th CPC was constituted in 2014, and its recommendations were implemented from 1 January 2016.