8th Pay Commission: Salary, Pension Arrears Likely To Accumulate From Jan 1

Even as the rollout of revised salaries and pensions under the 8th Pay Commission remains several months away, the accumulation of arrears is likely to begin from Jan. 1, 2026.

This was indicated in the press note issued following the Union Cabinet meeting on Oct. 28, when the formation of 8th Pay Commission under the chairmanship of Justice (retired) Ranjana Desai received the official nod.

At the time, the government had noted that as per the precedent, the next pay commission usually comes into effect 10 years after the last pay commission was implemented.

Since the 7th Pay Commission was rolled out from Jan. 1, 2016, it is therefore expected that the 8th Pay Commission would be implemented retrospectively from Jan. 1, 2026.

"Usually, the recommendations of the pay commissions are implemented after a gap of every ten years. Going by this trend, the effect of the 8th Central Pay Commission recommendations would normally be expected from 01.01.2026," stated the official note issued following the Cabinet meeting.

A similar scenario unfolded a decade ago as well, when the salaries and pensions revised in accordance to the 7th Pay Commission's report were rolled out from July 1, 2016. However, the employees and pensioners were paid arrears for the six months stretching between January and June 2026.

This time, the rollout of arrears could be larger, as the 8th Pay Commission is unlikely to submit its report before 2027. The panel has been given an 18-month period by the Centre. Since it was formally constituted on Nov. 3, 2025, the deadline is likely to lapse on May 2, 2027. The recommendations would be scrutinised by the Centre, before giving its final assent for the once-in-a-decade salary and pension overhaul.

Going by this estimated timeline, the Centre may end up paying arrears for a period of 1.5-2 years. To be sure, the government has not yet confirmed whether the arrears would be paid. In the press note, the government said it would "normally be expected" to roll out the revised pay retrospectively.

Key stakeholders, however, are firm that the Centre will be implementing the 8th Pay Commission retrospectively. The process will take time, but the effective date of implementation has to be the start of 2026, said Shiv Gopal Mishra, secretary (staff side) of the National Council-Joint Consultative Machinery, in an earlier conversation with NDTV Profit.

"The process is likely to take time. The commission will be set up and hold deliberations with the stakeholders and then submit its recommendations. Then it will be approved by the government... What we are saying is that irrespective of the delay, the effective date of salary hike must be Jan. 1, 2026," he had said.

The revision of salaries will positively impact around 50 lakh central government employees, and approximately 69 lakh pensioners. The impact on the exchequer is expected to be felt in financial year 2027-28.

When the 7th Pay Commission was rolled out, the estimated fiscal impact was of Rs 1.02 lakh crore in FY17, as per official data. In the case of 8th Pay Commission, this could be in the range of Rs 2.4-3.2 lakh crore, Kotak Institutional Equities said in a report released in July 2025.