The 8th Pay Commission is a ray of hope for more than 50 lakh central government employees and around 65 lakh pensioners, approved by the Union Cabinet on January 16, 2025. Viewed across inflation in 2024 at 5.2%, it is to revisit salaries and pensions from January 2026. This article covers the latest updates, the possible changes to salaries, and how to prepare.
Approval and Formation Process
Announced by Union Minister Ashwini Vaishnaw, the 8th CPC will be operationalized with effect from January 1, 2026, after the expiry of the 7th CPC in December 2025. Ministries like Defence, Railways, and Home Affairs are being consulted by the Government for finalizing the Terms of Reference (ToR). The chairperson and members of the commission could be expected to be appointed by May 2025, and the recommendations may be expected by late 2025. If any delay occurs, the implementation may occur around mid-2026, with arrears covering the gap, as was in the case with all preceding commissions.
Fitment Factor and Salary Hike
Fitment factor determining salary revision is expected to lie between 2.28 to 2.86 in comparison to 7th CPC’s 2.57. It raises the minimum basic salary from ₹18,000 to ₹41,040–₹51,480, giving a hike of 25 to 35 percent. At the level of ₹50,000, the revised pay may stand at ₹114,000–₹143,000. DA may reach 59% by July 2025. With DA being reset to zero, it shall merge into the new basic pay, reducing the actual benefit increase to 15 to 20 percent.
Impact on Allowances and Pensions
The commission will increase the allowances:
- HRA: Up to 27% in metros, thus adding ₹11,070 to ₹13,879 for a basic pay of ₹41,000.
- TA: Revised to ₹1,350–₹7,200, depending on city and grade.
- FMA: Proposed to be hiked from ₹1,000 to ₹3,000 a month for pensioners.A rise in pensions from ₹9,000 to ₹20,500–₹25,740 will make a big difference in the lives of retirees. Expected to cost ₹1.8–₹3.2 lakh crore, this is a great opportunity for various sectors like retail to flourish.
Proposed Structural Changes
Lower pay-level combinations (e.g., Level 1 with Level 2) have been proposed, among others, by those like the National Council-JCM, to reduce these disparities and therein expand career avenues. Keeping in view the efficiency pay matrix is also proposed. These have been thus designed to ensure a transparent and equitable salary structure to address the 7th CPC Committee anomalies.
Preparing for the Hike
Employees and pensioners must continue to:
- Record Updates: Make sure that Aadhaar, PAN, and bank particulars are consistent on the DoPT or EPFO portals.
- Track Updates: Keep an eye on doe.gov.in or dopt.gov.in for official announcements.
- Use Calculators: Appraise the revised pay via a calculator available at cleartax.in.
- Union Liaison: Keep as much in touch as possible with NC-JCM for any developments in the advocacy. Stay away from un-official sources to avoid getting lost in misinformation.
Also Read: July DA Hike Finalised: Central Employees To See Bumper Salary Boost