8th Pay Commission: Who Benefits And When Will Hikes Be Implemented?

While the formal constitution of the commission is in place, more than one crore government employees and retirees now await an official announcement detailing the timeline for salary revisions.

However, actual implementation may only take place in the financial year 2026–27, depending on administrative readiness and policy approvals.

Source : ABPLIVE AI

The Union Cabinet has already approved the formation of the 8th Pay Commission, which is tasked with revising the pay structure for central government employees and pensioners.

While the formal constitution of the commission is in place, more than one crore government employees and retirees now await an official announcement detailing the timeline for salary revisions.

Recommendations Likely by End of 2025, Rollout Expected in FY27

According to a report by Ambit Institutional Equities, the 8th Pay Commission is expected to submit its recommendations by the end of 2025. If the report is accepted and approved on schedule, the revised pay scales are likely to come into effect starting January 2026, reported Livemint.

However, actual implementation may only take place in the financial year 2026–27, depending on administrative readiness and policy approvals.

The expected salary and pension hike, which could range between 30–34 per cent, would mark a significant revision in government expenditure. As per the report, the increase would translate into an additional financial burden of Rs 1.8 lakh crore on the exchequer.

Who Stands to Benefit from the Pay Revision?

The new pay commission’s proposals are set to directly impact approximately 44 lakh central government employees across departments and ministries. In addition, nearly 68 lakh pensioners will also be covered under the revised framework, taking the total number of direct beneficiaries to over a crore. Notably, the 4.4 million central government employees and armed forces personnel account for about 0.7 per cent of India’s 60-crore workforce, and nearly 9 per cent of the formal sector, according to the report.

Fitment Factor to Play Key Role in Salary Hike

One of the critical tools used in pay revisions is the fitment factor, which serves as a multiplier to adjust salaries and pensions based on economic factors such as inflation and fiscal sustainability. This mechanism ensures that pay adjustments align with both employee needs and the government’s financial capacity.

The 8th Pay Commission follows the 7th Pay Commission, which was constituted in 2014 by the Manmohan Singh-led UPA government. Its recommendations were implemented from January 1, 2016, and remain in force till the new pay structure is rolled out. Traditionally, a pay commission is set up every decade to reassess the salary and benefit structure of government employees in line with macroeconomic conditions.