8th Pay Commission Update: Delay Fuels Anxiety for Central Employees and Pensioners

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8th Pay Commission: The eyes of government employees and pensioners are fixed on the 8th Pay Commission. Seven months have passed since its announcement in January 2025, but the chairman and members have not been appointed yet.

The commission can come into effect from January 1, 2026. However, there is a possibility of delay. If the fitment factor is 2.86, the minimum salary can reach Rs 51,480 and pension can reach Rs 25,740. Employee unions are putting pressure on the merger of DA, payment of arrears and restoration of OPS.

The announcement of the 8th Pay Commission for central employees and pensioners brought a ray of hope. But, even after seven months of its approval in January 2025, the process of its formation has not been completed yet. Neither the chairman and members of the commission have been appointed by the government nor its formal notification has been issued. This delay has further increased the uneasiness of lakhs of employees and pensioners.

Why is there a delay in the formation of the 8th Pay Commission?

The Finance Ministry has clarified that suggestions are being taken from various ministries, states and employee organizations before finalizing the terms of the commission. This process is believed to be the main reason for its slow pace. Minister of State for Finance Pankaj Chaudhary had said in Parliament that the notification of the commission would be issued in “appropriate time”. However, given the complexities of government machinery and financial balance, it is feared that this process may be delayed till early 2026.

When will the 8th Pay Commission be implemented?

It is officially stated that the 8th Pay Commission will be implemented from January 1, 2026. But, if delays in appointments and approvals continue, the deadline could slip to late 2027 or early 2028.

Fitment Factor and Possible Salary Hike

The fitment factor which forms the basis of salary revision can be between 1.8 to 2.86 this time. If the maximum formula of 2.86 is applied, then the minimum basic salary will increase from Rs 18,000 to Rs 51,480. At the same time, the minimum pension of pensioners can increase from Rs 9,000 to Rs 25,740. However, with this, DA (dearness allowance) will come down to zero after the implementation of the new pay commission.

Merger of Dearness Allowance

Currently, employees are getting 55% DA, which may increase to 58% in July 2025. As soon as the 8th Pay Commission is implemented, DA will be added to the basic salary. This will increase the salary of the employees but the new count of DA will start from zero.

Confusion over DA arrears of 18 months

During the Covid-19 pandemic, the payment of DA and DR (dearness relief) from January 2020 to June 2021 was stopped. Employee unions have repeatedly demanded that the arrears of these 18 months be settled. But, the government says that this is not financially possible, as it will put an additional burden of thousands of crores of rupees.

Main demands of employees unions

Employee organizations have placed several important demands before the central government. These include early formation and notification of the 8th Pay Commission, restoration of the Old Pension Scheme (OPS) and speeding up the recruitment process for vacant posts. Implementing an automatic system for salary revision, so that there is no need for a commission every 10 years.

Discussion on alternative pay system

According to some media reports, the government is considering a new system instead of the traditional pay commission system. In this, salary revision will be linked to the performance of the employees and the inflation rate. If this happens, the need to form a new commission every 10 years may end. However, there is no official confirmation on this proposal yet.

Financial impact and government challenge

After the implementation of the 8th Pay Commission recommendations, the government’s expenditure on salaries and pensions will increase significantly. This may affect the fiscal deficit. Therefore, the biggest challenge before the central government is how to maintain a balance between the expectations of employees and its economic policies.

 

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