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The Union Cabinet has approved the 8th Pay Commission, set to increase the minimum basic salary of central government employees to over ₹40,000 per month, with implementation expected from January 1, 2026.
8th Pay Commission.
8th Pay Commission: Even as the Union Cabinet has approved the constitution of the 8th Pay Commission, the minimum basic salary of central government employees is likely to rise beyond Rs 40,000 per month, along with perks, allowances and performance pay.
“For the 8th Pay Commission, a fitment factor between 2.6 and 2.85 is speculated, potentially increasing salaries by 25-30 per cent and pensions proportionately. The basic minimum is expected to rise beyond 40,000, along with perks, allowances and performance pay,” said Neeti Sharma, CEO of TeamLease Digital.
Importantly, this is an estimate and the final salary hike figures will be officially knows after the Commission submits later this year.
Currently, the employees get a minimum basic salary of Rs 18,000 per month (excluding perks, allowances and performance pay) under the 7th Pay Commission, which was increased from the 6th Pay Commission’s Rs 7,000. After including DA, HRA, TA and other allowances, the current minimum salary may reach Rs 36,020 per month under the 7th CPC.
The 7th Pay Commission introduced a fitment factor of 2.57, leading to an average salary hike of 23.55 per cent and aligning pensions with the ‘One Rank, One Pension’ scheme. Before that, the 6th Pay Commission applied a factor of 1.86.
8th Pay Commission: Timelines and Implementation
The 8th Pay Commission’s recommendations are expected to come into effect from January 1, 2026, according to reports.
Union Information and Broadcasting Minister Ashwini Vaishnaw explained the rationale for constituting the pay panel well in advance. “The last Pay Commission began in 2016, and its term will conclude in 2026. The establishment of the 8th Pay Commission in 2025 ensures sufficient time for recommendations to be implemented before the 7th Pay Commission period ends,” Vaishnaw said.
He added that the chairman and two members of the 8th Pay Commission will be appointed shortly.
The central government typically constitutes a pay commission every 10 years. The current 7th Pay Commission was formed in 2014 and its recommendations were implemented from January 2016, exactly 10 years after the 6th Pay Commission implementation on January 1, 2006.
Why the 8th Pay Commission Matters
“The 8th Pay Commission is pivotal in addressing evolving economic realities and ensuring government salaries and pensions remain competitive,” said TeamLease Digital’s Sharma.
She added that such revisions are crucial to counter inflation, rising living costs, and the widening gap between public and private sector remuneration. Beyond financial benefits, the revised pay scales will also enhance disposable incomes, stimulating consumption and contributing positively to the economy. Periodic revisions reflect the government’s commitment to a fair and equitable system that values its workforce and ensures they are financially empowered.
8th Pay Commission: Impact On Govt Exchequer
Aditi Nayar, chief economist of ICRA Ltd, said, “While the award related to the 8th Pay Commission is unlikely to affect fiscal metrics in FY2026, 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.”
The 7th pay commission saw an expenditure increase of Rs 1 lakh crore for FY 2016-17.
