8th Pay Commission: 10 Key Questions Answered — All You Need To Know

The Union Cabinet had on Tuesday approved the Terms of Reference for the 8th Central Pay Commission. This marks a crucial step that formally initiates the process of revising the salary, allowances, and pension structure for central government employees and pensioners.

Here are 10 Key Questions Answered about the next pay revision:

1. What is the latest update on the 8th Pay Commission?

The most recent development is the approval of the Commission’s Terms of Reference (ToR) by the Union Cabinet. This ToR acts as a blueprint, setting the mandate, composition, and timeline for the temporary body to begin its work.

2. When will the new salaries officially come into effect?

The new pay scales and pensions are expected to come into effect retrospectively from January 1, 2026, maintaining the traditional 10-year gap between Pay Commissions.

3. How many central government employees and pensioners will benefit?

The pay revisions are set to benefit approximately 50 lakh serving central government employees and around 65-69 lakh retirees/pensioners, totaling over 1.15 crore direct beneficiaries.

4. Who has been appointed to lead the 8th Pay Commission?

The Commission will be led by former Supreme Court judge Justice Ranjana Prakash Desai as the Chairperson. She will be assisted by Professor Pulak Ghosh as a Part-Time Member and Pankaj Jain as the Member-Secretary.

5. What is the deadline for the Commission to submit its report?

The 8th CPC has been mandated to submit its recommendations to the government within 18 months of the date of its constitution.

6. How much of a salary hike is being projected?

While official slabs are yet to be determined, projections based on past trends suggest that the salary and pension hike could be in the range of 30-34%. This could raise the minimum basic pay from the current Rs 18,000 to a range of Rs 33,000 to Rs 44,000.

7. What is the significance of the 'Fitment Factor'?

The hike is primarily driven by the Fitment Factor, which is a multiplier applied to the existing basic pay to determine the new basic salary. The 7th CPC used a factor of 2.57; the 8th CPC’s fitment factor will be key to the final salary revision.

8. Will central government employees receive arrears?

Yes, since the new pay and pension will be implemented retrospectively from January 1, 2026, employees are likely to receive arrears for the period between the effective date and the actual date of disbursement (which may stretch into 2027).

9. What economic factors will the Pay Commission prioritise?

The Commission will be required to keep in view the overall economic conditions of the country, the need for fiscal prudence, and ensuring adequate resources for developmental expenditure.

10. Will the recommendations impact State Governments’ finances?

The Commission must consider the likely impact of its recommendations on the finances of the State Governments, as states typically adopt the central pay commission’s suggestions with some modifications.