8th Pay Commission Approved For Government Employees, Pensioners Ahead Of Budget

The government has approved the formation of 8th Pay Commission for the revision of salaries of central government and pensions of retirees, Union Minister Ashwini Vaishnaw announced on Thursday.

"Prime Minister Narendra Modi has approved the formation of 8th Central Pay Commission for the benefit of all central government employees and pensioners," Vaishnaw said, while briefing the press following the meeting of the Union Cabinet.

"Since 1947, seven pay commissions have been formed. The 7th Pay Commission came into effect in 2016. Its tenure will conclude in 2026. By deciding to form the 8th Pay Commission in 2025, we have sufficient time to receive recommendations well before the completion of the period of 7th Pay Commission," he added.

"This process will involve massive consultation with state governments, central government, PSUs and different stakeholders. A chairman and two members will also soon be appointed for the commission," Vaishnaw further said.

The move is expected to benefit around 50 lakh central government employees, including defence personnel, along with more than 65 lakh pensioners, government sources told NDTV Profit.

Approximately 4 lakh employees in Delhi will also benefit, as the salary of Delhi government's staff is typically revised with the implementation of central pay commission, they added.

Pay commissions are generally formed once in every 10 years to recommend the fitment factor, and other modalities for the revision of salaries of employees and the pensions paid to the retirees.

The last pay panel, which was the 7th Pay Commission, was formed by the then Manmohan Singh-led government in February 2014. Its recommendations were implemented by the government from January 2016 onwards.

The announcement by Vaishnaw comes amid persistent demands from the employee unions and staff associations, who have been calling for the formation of 8th Pay Commission at the earliest to revise the salary from January 2026 onwards.

"Since the last pay hike came into effect from Jan. 1, 2016, the next salary should be revised from Jan. 1. 2026. As far as I know, no government can deny the salary hike after 10 years," All India Railwaymen's Federation Secretary General Shiv Gopal Mishra told NDTV Profit.

Mishra, who is also the secretary (staff side) of the National Council-Joint Consultative Machinery or NC-JCM—an official platform to resolve the disputes between the government and its staff through dialogue—told NDTV Profit earlier that he is expecting a fitment factor of "at least 2.86" to be recommended for the salary revision.

The fitment factor of 2.86, as demanded by AIRF, would mean a 186% hike in the salaries. Notably, the 7th Pay Commission had used a fitment factor of 2.57 to raise the wages and pensions.

The demand for the formation of 8th Pay Commission was also most recently raised by central trade unions in a pre-budget consultation meeting with Finance Minister Nirmala Sitharaman.

The National Federation of Indian Railwaymen, one of the leading employee unions representing Railway employees, has separately demanded the government to revise the minimum salary to Rs 32,500 at the earliest as per "Dr. Aykroyd formula", while immediately setting up the 8th Pay Commission to recommend the fitment factor and other modalities for overall wage revision.

The 7th Pay Commission, which was implemented from 2017 onwards, caused an estimated impact of Rs 1.02 lakh on the exchequer during fiscal 2017, as per the official data.

The formation of 8th Pay Commission is expected to have an overall positive effect on the economy, despite the impact on exchequer. This will provide a significant boost to consumption and economic growth, along with improved quality of life for government employees, government sources told NDTV Profit.

According to Mishra, the time was apt for 8th Pay Commission's formation and the impact of the exchequer should not be seen as a factor against it. "India's GDP is advancing at a strong pace, all sectors are growing, and the overall economic conditions are upbeat. There is no reason why the 8th Pay Commission should not be formed now. We conveyed the same in a meeting held with the Finance Secretary (in November)," the union leader said.

• The 1st Pay Commission was formed in May 1946, and it recommended a minimum salary of Rs 55 per month. The panel was headed by  Srinivasa Varadacharia.

• The 2nd Pay Commission was set up in August 1957, under the chairmanship of Jaganath Das, and it recommended a minimum wage of Rs 80 per month.

• The 3rd Pay Commission, under the chairmanship of Raghubir Dayal, was formed in April 1970. It recommended a minimum salary of Rs 185 per month.

• The 4th Pay Commission, formed in September 1983, recommended a minimum wage of Rs 750 per month. It was chaired by P N Singhal.

• The 5th Pay Commission was constituted in April 1994, under the chairmanship of Justice S. Ratnavel Pandian. It had recommended a minimum salary of Rs 2,550 per month.

• The 6th Pay Commission was formed in October 2006, and it recommended a minimum pay of Rs 7,000 per month. The panel, which was headed by Justice B N Srikrishna, also fixed a maximum salary of Rs 80,000 per month.

• The 7th Pay Commission, under the chairmanship of Justice A K Mathur, was constituted in February 2014. It recommended a minimum monthly wage of Rs 18,000 and maximum pay of Rs 2.5 lakh per month. The recommendations came into effect from January 2016.