The government has not yet made any major announcement regarding the Eighth Pay Commission. Nor has a final decision been taken on its Terms of Reference, i.e., TOR and members.
Since the announcement of the 8th Pay Commission in January, there have been many speculations about the increase in salary and pension of Central Government Employees and pensioners. However, now the focus is not only on salary but also on allowances, in which major changes are expected.
Proposal to increase the medical allowance of pensioners from Rs 1,000 to Rs 3,000
In the 34th SCOVA (Standing Committee of Voluntary Agencies) meeting held at Vigyan Bhavan in New Delhi on 11 March 2025, a proposal to increase the fixed medical allowance of pensioners to Rs 3,000 was passed. SCOVA is a platform where the problems of pensioners and suggestions related to their welfare are discussed. Currently, this allowance is Rs 1,000 per month.
Pensioners had described this amount as very low compared to inflation and rising medical expenses and had demanded an increase. This increased allowance can be implemented from January 1, 2026, as it has been recommended to include it in the TOR of the 8th Pay Commission.
Work on the new structure of HRA and other allowances continues.
It was made clear in the meeting of SCOVA that, along with the salary, the main allowances like House Rent Allowance (HRA), Travel Allowance (TA), Dearness Allowance (DA), and Medical Allowance will also be reviewed in the 8th Pay Commission. According to reports, the rate of HRA is likely to be kept higher in metro cities. Travel allowance can be calculated differently for employees posted in rural and semi-urban areas.
Apart from this, preparations are also being made to abolish some old and useless allowances so that the system can be more transparent and practical.
Discussion on fitment factor and DA merger too
In the previous pay commission, the fitment factor (8th Pay Commission Fitment Factor) was 2.57, due to which the minimum salary (8th Pay Commission Basic Salary) was fixed at Rs 18,000. Now the news is that it is being considered to increase it from 2.8 to 3.0. If this happens, the minimum salary can go up to Rs 26,000 to Rs 27,000, and the pension can also be around Rs 25,000.
However, there is no official confirmation from the government on this. Discussion is also going on to merge DA into basic pay. This will not have much impact on the total salary, but the rate of increase in DA may be reduced in the future.
When will the recommendations of the 8th Pay Commission be implemented?
It may take time for the recommendations of the 8th Pay Commission to be implemented because the formal formation of the commission and the TOR are yet to be decided. Usually it takes 18 to 24 months from the formation of the commission to the implementation of the recommendations. In such a situation, the date of 1 January 2026 may be postponed. Now everyone’s eyes are on when the government makes a new announcement regarding the 8th Pay Commission.