The Prime Minister Narendra Modi-led Union Cabinet has approved the 8th Pay Commission, which is scheduled to come into effect from January 1, 2026.
This commission will undertake a comprehensive revision of:
salaries of central government employees
pensions of retired employees
allowances including DA and other benefits
The goal is to balance inflation, employee welfare, and sustainable public finances — much like previous pay commissions.
The 8th Pay Commission will revise pensions, allowances, and salaries of serving and retired central government employees. Alongside salary hikes, the Commission will also adjust the Dearness Allowance (DA) to factor in inflation.
While the government has not officially disclosed final salary figures, estimates provide a strong indication of what employees may expect.
Although the government has not released details about the percentage of hikes under the 8th Pay Commission, media reports estimate that, based on the fitment factor, a central government employee's basic salary could rise to ₹51,480 from ₹18,000.
Currently, India has:
nearly 50 lakh central government employees, including defence personnel
about 65 lakh pensioners, including defence retirees
The central government sets up pay commissions once every ten years to evaluate and revise employee salaries and retirement pensions, ensuring wages remain aligned with economic changes.
In a social media post on 13 December 2025, the Indian government debunked a claim that central government pensioners would stop receiving DA hikes under the new Finance Act 2025.
Authorities clarified that the claim was “fake” and that post-retirement benefits, such as DA hikes and Pay Commission revisions, would only be stopped if an employee was “dismissed for misconduct.”
The government further stated:
“Rule 37 of the CCS (Pension) Rules, 2021 has been amended to state that if an absorbed PSU employee is dismissed for misconduct, their retirement benefits will be forfeited,” the government said.
This means DA hikes will continue for eligible pensioners.
The 8th Pay Commission will consider multiple factors, including inflation, and aim to ensure sustainable public finances that have remained unchanged since the 7th Pay Commission in 2015.
Experts told source that the government will take into account inflation trends, real wage erosion, fiscal capacity, and its broader compensation philosophy.
Early projections from the 8th Pay Commission suggest that the fitment factor, determined in relation to the economic inflation of a country, may be as high as 2.57, which will likely raise central government salaries and pensions for nearly one crore employees and retirees.
“While the government has not declared an official number yet, early expectations place the 8th Pay Commission fitment factor in the range of 1.83 to 2.57,” CA Chandni Anandan, Tax Expert at Clear Tax, told Source.
As per previous media reports, the current Pay Commission used a fitment factor of 2.57; however, this does not necessarily mean that salaries will increase by the same amount.