8th Pay Commission Approved: What Salary Hike Can Central Government Employees Expect?

8th Pay Commission Announcement: The 7th Pay Commission will conclude in 2026, after which the 8th Pay Commission will take effect.

Prime Minister Narendra Modi's government has approved the establishment of the 8th Pay Commission for central government employees. Information and Broadcasting Minister Ashwini Vaishnaw announced the approval on Thursday. The announcement follows the dearness allowance exceeding 50 per cent of the basic salary for central government employees. The 7th Pay Commission will conclude in 2026, after which the 8th Pay Commission will take effect.

Union Minister announced that the 8th Pay Commission is expected to be formed by 2026. He added, "As the 7th Pay Commission's term concludes in 2026, initiating the process in 2025 ensures sufficient time to receive and review recommendations before its completion."

In a post on X (formerly Twitter), PM Modi wrote, "PM Modi on X said, "We are all proud of the efforts of all Government employees, who work to build a Viksit Bharat. The Cabinet's decision on the 8th Pay Commission will improve quality of life and give a boost to consumption." 

Starting July 1, 2024, central government employees and pensioners are entitled to receive 53 per cent of their basic pay as dearness allowance/relief. A further hike in dearness allowance/relief is expected from January 2025. Currently, government salaries and pensions are based on the recommendations of the 7th Pay Commission, which were implemented on January 1, 2016. The recommendations of the 8th Pay Commission will be announced in the future. 

What Salary Hike Central Government Employees Can Expect?

Krishnendu Chatterjee, Vice President at TeamLease told The Economic Times, “The Last Pay Commission was established in 2016, which recommended the minimum pay jump from 7,000 per month to 18,000 per month with a fitment factor of 2.57 times of basic pay. The maximum ceiling is 2.5 lakhs per month. Considering the inflation factor, there are indications that the fitment factor may stay between 2.5- 2.8 times, which will give a significant boost to employee salaries between Rs 40,000 and Rs 45,000. There are also suggestions of Performance-based pay hike which are still under deliberation.” 

Rohitaashv Sinha, Partner, King Stubb and Kasiva, Advocates and Attorneys said in the report that the pay commissions are in most cases established every 10 years to assess and provide changes to the remunerations of central government employees. “The last pay commission, i.e. the 7th pay commission took effect in January 2016 and gave a raise on the minimum basic pay from Rs 7000 to Rs 18000 using the fitment factor 2.57. In the 8th Pay Commission, it is believed that the increase the minimum basic pay will be an astonishing 186 per cent. This may make the minimum basic pay to Rs 51,480 per month. It seems that the fitment factor for it is 2.86. The changes are likely to be implemented through the Central Civil Services (Revised Pay) Rules, 2025 and may lead to enhanced pension and other retiral benefits such as EPF, Gratuity etc. and recommend changes in salary structures for government employees,” he said.