In a major decision set to benefit nearly 50 lakh Central Government employees and 69 lakh pensioners, the Union Cabinet led by Prime Minister Narendra Modi has approved the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC). This move officially sets in motion the process for reviewing salaries, pensions, and allowances across the Central Government workforce, including Defence personnel.
The 8th CPC will play a crucial role in redefining the pay structure for millions of employees, taking into account India’s fiscal strength, inflation levels, and the need to ensure financial discipline. According to the Finance Ministry, the Commission will consist of a Chairperson, one part-time member, and a Member-Secretary, and will function as a temporary body.
The Commission has also been given the flexibility to submit interim reports on key issues even before presenting its final recommendations.
Expected Salary Hike Under the 8th Pay Commission
Experts believe that the fitment factor — the most awaited component of every Pay Commission — is likely to rise from 2.57 (under the 7th CPC) to around 3.0 this time.
If approved, this could translate into a salary hike of nearly 25–30%, offering a substantial boost to government employees and retirees alike.
Under the 7th Pay Commission, implemented in 2016, the basic pay and pensions were multiplied by 2.57, resetting the Dearness Allowance (DA) and Dearness Relief (DR) to zero. The move had provided an overall pay hike of approximately 23.5% at that time.
At present, the minimum basic salary of a Central Government employee stands at ₹18,000 per month, while the Cabinet Secretary earns ₹2.5 lakh per month. The current DA/DR rate is 58%.
When Will Employees Get the Hike?
The 8th CPC, officially formed in October 2025, is expected to submit its final report by mid-2027. After the report’s submission, the Centre may take 3 to 9 months to review and approve it.
This means the new salary structure could be implemented sometime in late 2027.
However, the good news is that the revised pay scales will be applicable retrospectively from January 1, 2026, ensuring that employees receive arrears for the intervening period.
Balancing Growth and Fiscal Prudence
Officials emphasize that the 8th CPC’s recommendations will aim to strike a balance between employee welfare and economic stability, ensuring that funds remain available for development projects while improving living standards for government staff.
The approval of the 8th Pay Commission marks yet another major step in the Modi government’s commitment to enhancing the welfare of its employees, while maintaining fiscal discipline and driving the vision of a Viksit Bharat by 2047.
