Parliament Likely To Take Up Delay In 8th Central Pay Commission Panel Formation

With central government employees and pensioners anxiously awaiting clarity, several MPs have submitted formal questions to the Ministry of Finance, seeking information on the current status of the commission, reasons for the delay in its formation, the timeline for appointing the Chairperson and members, and the expected schedule for implementing the revised pay and pension structures.

While Ministry officials said they will keep providing important updates concerning the commission’s formation, terms of reference, proposed timeline, and other structural aspects, the delay has drawn national attention, particularly from central government employees, as they are struggling with stagnant salaries. 

What Is The Central Pay Commission?

Every decade, the Centre constitutes a CPC to revise the compensation structure of its employees and pensioners, including those in the armed forces. The current pay structure, formulated by the 7th Pay Commission, was implemented in January 2016. Given the timeline, the 8th Pay Commission’s recommendations are expected to come into effect in the financial year 2026-27.

Meanwhile, expectations of central government employees have risen after a recent report by a top financial advisory firm projected a possible 30-34 per cent increase in salaries and pensions under the new commission. 

This potential hike could add up to Rs 1.8 lakh crore to the government’s annual expenditure, posing a significant fiscal challenge. But the move is likely to be welcomed by millions of employees and pensioners across the country.

What's The Fitment Factor?

The most important among all components of the pay revision is the fitment factor — a multiplier used to calculate the new basic pay. The report estimates this factor to be in the range of 1.83-2.46.

This would mean the current minimum basic salary of Rs 18,000 could rise to Rs 32,940 at the lower end, and up to Rs 44,280 at the higher end of the fitment range. For those currently earning a basic pay of Rs 50,000, the revised salary could range between Rs 91,500 and Rs 1.23 lakh, depending on the multiplier used.

In addition to basic pay, analysts expect the 8th CPC to also revise the dearness allowance (DA) to better reflect inflation rates, ensuring that the revised salaries maintain purchasing power. Pension structures will also be realigned with the updated pay matrix, ensuring parity for retirees.

Will CPC Boost Economic Growth?

Beyond individual benefits, experts suggest that a substantial pay revision could stimulate broader economic growth.

Higher disposable incomes are expected to boost consumption, enhance living standards, improve access to healthcare and education, and invigorate sectors like housing and retail, while exerting a wide-reaching impact on the Indian economy.

Now, everybody is waiting to hear the Finance Ministry’s response to questions about the delay in Parliament.