The 8th Pay Commission was approved by the Union Cabinet and is scheduled to take effect on January 1, 2026, raising the minimum basic income for central government employees to nearly ₹40,000 per month.
8th Pay Commission: Despite the Union Cabinet’s approval of the commission’s establishment, central government workers’ base pay is expected to increase to more over Rs 40,000 per month, in addition to benefits like performance pay and perks.
A fitment factor of 2.6 to 2.85 is hypothesized for the 8th Pay Commission, which might result in a 25–30% increase in salary and a corresponding increase in pensions. Along with benefits, allowances, and performance compensation, the basic minimum wage is anticipated to increase to almost $40,000, according to TeamLease Digital CEO Neeti Sharma.
Crucially, this is only an estimate; the Commission’s submission later this year will include the official salary increase data.
Under the 7th Pay Commission, employees now get a minimum base wage of Rs 18,000 per month (excluding perks, allowances, and performance pay), up from Rs 7,000 under the 6th Pay Commission. The present minimum pay under the 7th CPC may reach Rs 36,020 per month after taking into account DA, HRA, TA, and other perks.
The 7th Pay Commission’s 2.57 fitment factor resulted in an average salary increase of 23.55 percent, and the “One Rank, One Pension” scheme was aligned with pensions. Early on, Union Information and Broadcasting Minister Ashwini Vaishnaw explained why the pay panel was established. The final Pay Commission started in 2016 and will expire in 2026. Establishing the 8th Pay Commission in 2025 will allow enough time for recommendations to be implemented before the 7th Pay Commission period ends. He also stated that two members and the chairman of the 8th Pay Commission will be appointed shortly.
Every ten years, the central government usually forms a pay commission. Exactly ten years after the implementation of the Sixth Pay Commission on January 1, 2006, the current Seventh Pay Commission was established in 2014, and its recommendations were put into effect in January 2016.
The Significance of the Eighth Pay Commission
Sharma of TeamLease Digital stated, “The 8th Pay Commission is essential in tackling changing economic realities and guaranteeing that government salaries and pensions stay competitive.”
Such changes, she continued, are essential to combating inflation, growing living expenses, and the growing pay disparity between the public and private sectors. In addition to providing financial advantages, the updated pay scales will increase disposable incomes, which will boost spending and boost the economy. The government’s dedication to a just and equitable system that values its employees and guarantees their financial empowerment is reflected in the periodic revisions.
8th Pay Commission: Impact On Govt Exchequer
“The award related to the 8th Pay Commission is unlikely to affect fiscal metrics in FY2026, but the potential impact of the same should be built into the new medium term fiscal consolidation path as well as the Finance Commission’s recommendations,” stated Aditi Nayar, chief economist at ICRA Ltd.
For FY 2016–17, the 7th pay commission’s expenditures increased by Rs 1 lakh crore.