Eighth Pay Commission Updates: The Union Cabinet chaired by Prime Minister Narendra Modi has approved the Term of Reference (ToR) of the Eighth Pay Commission. This decision has brought great relief to more than 1 crore government employees and pensioners, who were waiting for this announcement for the last 10 months. The government officially approved it on 28 October (Tuesday).

What is Term of Reference (ToR)?

The term of reference is the framework on the basis of which the Pay Commission prepares its suggestions – that is, through this the Commission decides how much the basic pay, allowances and pension should be increased. The government has clarified that while preparing its recommendations, the Commission will keep in mind the country’s financial condition, fiscal management and the ability to spend on development and welfare schemes.

After the implementation of the recommendations of the 8th Pay Commission, the following employees will benefit from it – permanent and temporary employees of the Central Government, employees of the Ministry of Defense and Armed Forces, Railways, Postal Department, and Central Armed Police Forces (CAPF) employees and pensioners.

How much will the salary increase?

Fitment factor will be the basis for increase in salary of employees. In the Seventh Pay Commission, this factor was kept at 2.57x. For example, if the basic salary of an employee was Rs 20,000, then the new salary became: Rs 20,000 × 2.57 = Rs 51,400.

If this time the government increases the fitment factor further (say to 3.0x or 3.5x), then a bigger jump in salary is possible.

When will the 8th Pay Commission be implemented?

According to the government, the recommendations of the 8th Pay Commission will come into effect from January 2026. However, the commission has been given 18 months time to submit its report. Therefore, there is a possibility that this pay revision may be implemented by 2027 or 2028.

About 10 months ago, Union Minister Ashwini Vaishnav had informed about the formation of the 8th Pay Commission. He had said that the Commission will review the salaries, pensions and allowances of government employees so that the salaries can be revised to match the current economic scenario.

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The central government may have indicated at the beginning of the year about the 8th Pay Commission, but no official announcement has been made so far. This has created an atmosphere of doubt and anxiety between more than 50 lakh central employees and more than 65 lakh pensioners across the country.

Shiv Gopal Mishra, Secretary, NC-JCM (National Council-Joint Consultative Mechanism), wrote a letter to the Cabinet Secretary on 18 June 2025, saying that the government should now make the terms of Terms of Reference (Tor) i.e. Commission’s functioning.

Government announcement, but no formal order

According to a report published on Financial Express, Shiv Gopal Mishra said in his letter that in January 2025, the Ministry of Personnel (DOPT) had informed that the government has decided to set up the 8th Pay Commission and its conditions are being finalized. Also, suggestions were also sought from the representatives of the employees, which were given on time. But so far neither TOR has been released, nor has any official notification of the formation of the commission. Due to this silence, the apprehension among employees and pensioners is increasing.

Skepticism on pension not just salary

The biggest concern is about retired employees (pensioners). It has also been mentioned in the letter that in the recent Finance Bill, it has been said that if the government wants the benefits of the Pay Commission or not to the pensioners, it will be completely dependent on the government’s discretion. Due to this, a sense of resentment and insecurity among 65 lakh pensioners has started to flourish. They want that just as the employees engaged in service will get salary amendment, they should also get equal benefits.

Three major demands of employee organizations

Tor should be made public: so that rumors stop and remain confident in employees.

Pensioners get equal rights: Both employees and pensioners should get the benefit of salary amendment.

The commission should be formed soon: so that the report can come on time and can be implemented before 2026.

What is the Pay Commission and why is it necessary?

The Government of India formulates the pay commission every 10 years, which reviews the salary, allowances and service conditions of central employees and pensioners. After this, he gives recommendations to the government, by implementing the government changes in salary.

The 7th Pay Commission came into force in January 2016. Now the 8th Pay Commission is likely to be implemented in 2026. But if the commission is not formed on time, then employees can be deprived of new pay scale for a long period.

Is the government withdrawing from its promise?

According to NC-JCM, due to no clarity from the government, the employees are afraid that the 8th Pay Commission does not become just a political statement. Shiv Gopal Mishra clearly says that if the government does not give clear guidelines soon, it will not only weaken the morale, but will also raise questions on the intention of the government.

After all, what will be the effect?

This uncertainty will affect not only the government employees, but also on their families, the ability to spend and the country’s consumer economy. When millions of employees and pensioners have doubts about their future, then everything from market to morale is affected.

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8th Pay Commission Salary Structure: The Central Government has taken steps towards the 8th Pay Commission. The Finance Ministry has started the process of filling 35 posts for the Commission, which is an indication that the government may soon formalize the structure and works of the Pay Commission. This can benefit 47.85 lakh central employees and 68.62 lakh pensioners across the country.

Appointment will be done for 35 posts for commission

According to the news published on Good Returns, according to a circular issued by the Finance Ministry on 17 April 2025, appointments will be made to 35 posts for the 8th Pay Commission, which will be on deputation basis. The tenure of these officers will be effective from the date of the formation of the Commission to its conclusion.

The circular states that these appointments will be made according to the guidelines of the Department of Personnel and Training (DOPT). The names of eligible officers have been sought from the concerned departments.

What can be the big things of the 8th Pay Commission

According to Cleartax report, some important changes can be seen in the 8th Pay Commission. Among them, the increase in fitment factor is the most prominent. Currently the fitment factor is 2.57, which can be increased to 2.85. This will increase the basic salary of all government employees and pensioners.

Apart from this, the current DA can be merged into the new basic salary, which will make dearness allowances and other allowances will be counted afresh. HRA and TA can also be amended. That is, house rent allowance and travel allowance can be re -determined on the basis of new pay scale. At the same time, the Commission can give special suggestions to increase the pension amount and ensure timely payment.

How much can salary increase?

If the basic salary of a government employee is 50,000 and he is working in Delhi (where HRA is 30 percent), then an estimated calculation can occur as follows.

Basic Pay × Fitment Factor (2.85) = 1,42,500

+ HRA (15,000) = 1,57,500 (Estimated gross salary)

These figures are only for example, the government has not yet released any official calculation.

Can be applicable from 1 January 2026

The last i.e. 7th Pay Commission came into force from 1 January 2016 and according to tradition the Pay Commission is applicable every 10 years. In this sense, the 8th Pay Commission can be effective from January 2026.

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8th pay commission salary hike: Ever since the Modi government has announced the formation of the 8th Pay Commission, about 36.57 lakh government employees and 33.91 lakh pensioners are sitting in the hope that their salary and pension will increase significantly since the implementation of this pay. However, there are many employees in this country, which we consider government, but this pay commission will not be applicable to them.

That is, after the implementation of the 8th Pay Commission, where the salary of lakhs of employees will increase, there will be no increase in salary of employees working in these departments. Let us explain to you in detail about these departments.

First understand how much salary will increase from the 8th Pay Commission

Under the 8th Pay Commission, the increase in salary of government employees will be determined mainly on the basis of fitment factor and allowances. According to media reports, the fitment factor can be between 1.92 and 2.86. In an easy language, consider it in such a way that if the current basic salary of an employee is Rs 20,000 and the fitment factor is 2.86, then the new salary of the employee will be 20,000 × 2.86 = 57,200 rupees. Let us tell you, according to the 7th Pay Commission, at present the minimum basic salary is 18,000, which can be potentially increased to 51,480, if the fitment factor 2.86 is applied.

These people will be out of the 8th Pay Commission

When any pay commission is applicable, it first applies to central government employees. After this, the state governments apply it to themselves and this benefits the government employees of the state government. However, the Pay Commission does not apply to the High Court, Supreme Court judge, Public Sector Undertaking (PSU) or employees of any autonomous body. Actually, the rules of salary and allowance are different for these people and only those rules apply to them.

When will the 8th Pay Commission come into force

Given the deadline of the previous pay commissions, the possible deadline for the implementation of the 8th Pay Commission can be estimated. The recommendations of the 6th Pay Commission came into force in 2006, while it was formed in 2005. At the same time, the 7th Pay Commission was formed in February 2014 and recommendations were implemented from 1 January 2016. While the 8th Pay Commission was announced in January 2025. At the same time, there is a plan to implement it from 1 January 2026. However, according to experts, there may be a delay in implementing it due to lack of funds in Tor and budget.

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Ever since the announcement of the 8th Pay Commission, the discussion has intensified on the ‘Fitment Factor’ on the basis of the amendment in the salary and pension of the central government employees and pensioners.

According to reports, the fitment factor in the 8th Pay Commission can be between 1.92 and 2.86. Actually, the fitment factor is a multiplier, which the government uses to revise the salaries and pension of the employees. However, there is also a misconception about the fitment factor.

What is the real meaning of fitment factor?

It is a misconception that if the fitment factor in the 8th Pay Commission is 2.86, then the salary and pension will increase equally. Actually, the fitment factor applies only to the basic salary, not to gross salary.

Why does salary and pension increase not in proportion to fitment factor?

According to the report of Financial Express, the fitment factor does not show much effect on the gross salary, as many other components are also included in the total salary. While revising salary and pension, the pay panel takes into account many other aspects, such as merging DA with basic pay and adding or removing many allowances. This ensures that the calculation of the fitment factor will be applicable only to the basic pay.

Understand it in easy language that the fitment factor in the 7th Pay Commission was 2.57, which increased from Rs 7,000 to Rs 18,000. But, when it comes to the real increase, the salary and pension of the level 1-3 employees increased by an average of 15 percent. However, the employees of Level 4-10 got more increase.

At the same time, the fitment factor in the 6th Pay Commission was 1.86, but the salary and pension increased by 54 percent. It is clear that having high fitment factor does not mean that the total salary will increase equally.

Actual increment in previous pay commissions (percent)

Second Pay Commission: 14.2 percent

Third Pay Commission: 20.6 percent

Fourth Pay Commission: 27.6 percent

Fifth Pay Commission: 31.0 percent

Sixth Pay Commission: 54.0 percent

Seventh Pay Commission: 14.3 percent

When will the 8th Pay Commission be set up?

Now that the date of formation of the 8th Pay Commission is approaching, government employees and pensioners are expecting a good increment this time, so that they can live a “respectable and dignified life”. Let us tell you, the 8th Pay Commission is expected to be formally formed in April 2025.

Earlier, the employee side of the National Council of Joint Consultative Mechanism (NC-JCM) suggested that the terms and conditions of the new pay commission should also include review of retirement benefits like salary, allowances, other benefits, pension and gratuity in the terms and conditions of the new pay commission. Now it remains to be seen how much the 8th Pay Commission meets the expectations of government employees.

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