8th Pay Commission, Big news has come out regarding the 8th Pay Commission. According to a report, this commission will come into effect from January 1, 2028 and may prove to be the decision with the biggest financial impact in the history of the country.
Speaking at the CII IndiaEdge 2025 Summit, Prime Minister’s Economic Advisory Council (EAC-PM) member Neelkanth Mishra warned that the total burden of the new pay and pension revision could rise from ₹4 lakh crore to ₹9 lakh crore, including arrears of five quarters. He said both the Center and the states would face a “huge fiscal challenge”.
what are the details
According to a report in Business Today, the annual salary and pension bill alone will entail an additional cost of ₹4-5 lakh crore, which will continue to rise every year from FY28-29. Apart from this, the arrears for the 5 quarters from January 2026 to March 2028 can reach approximately ₹ 3.5-4 lakh crore, which will be a huge payment to be made in one go. That means the total shock in the first year itself is ₹7.5-9 lakh crore, which is 7-8 times more than the 7th Pay Commission. The main reason for this is the already high base of government salary and pension of ₹ 11-12 lakh crore, as well as the possible recommendation of fitment factor of 2.5-3 times.
what did the government say
Meanwhile, the government has made it clear that the scope of the 8th Pay Commission covers all “pay, allowances, pension etc.” In the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary confirmed that pension revision is also included in the commission’s responsibility, thereby alleviating the worries of lakhs of pensioners. However, at present there is no plan to merge DA-DR. The government has said that any such step will be considered only after the 8th CPC report comes out, while DA is expected to cross 50% in mid-2026.
Central employees will get relief
Overall, 50 lakh central employees and 69 lakh pensioners will definitely get relief, but it will be a difficult balancing time for the country’s economy. With the Commission’s report due in 2027 and implementation in 2028, this decision is going to be a real test of the government’s financial management. As Neelkanth Mishra said, “FY28 will be a significant fiscal inflection point for India.”