The 8th Pay Commission’s recommendations are expected soon, impacting 1.12 crore central government employees and pensioners. A significant salary and pension hike of 30-34% is anticipated, a substantial increase from the 7th Pay Commission’s 14%.
Recommendations from the 8th Pay Commission, which could significantly increase the income of about 1.12 crore central government employees and pensioners, may be announced soon. This new reform will replace the 7th Pay Commission, which has been in effect since 2016. Economists assess that this will create significant ripples in the Indian economy. The 7th Pay Commission had provided an approximate 14 percent increase in basic salary.
However, this time, Ambit Institutional Equities reports that there could be a 30 to 34 percent increase in salary and pension. Experts suggest that the fitment factor, which determines the salary hike, could range from 1.9 to 3.0. This will bring a significant change to the basic salary. Even if the implementation of the commission’s recommendations is delayed, employees are likely to receive arrears effective from January 1, 2026.
Impact on the Economy
It is estimated that implementing the new pay revision will create an additional liability of about Rs 1.8 lakh crore for the central government. As the center increases salaries, state governments are also likely to move towards pay revision, as in the past. With more money in people’s hands, consumption will increase, which will boost the country’s economic growth.
An employee with a current basic salary of Rs 50,000 can expect an increase of at least 14 to 34 percent through the new commission when the dearness allowance reaches 60 percent by the end of 2025. When tax exemptions are also considered, this will greatly benefit the financial situation of ordinary employees.