Central government employees and pensioners may soon receive one of the biggest pay upgrades in a decade, as preparations for the 8th Pay Commission have quietly begun. The commission is expected to come into effect by 2026, and its recommendations could significantly improve salaries, pensions, and benefits for lakhs of government workers.
Roles Of 8th Pay Commission?
The 8th Pay Commission will be responsible for proposing changes to basic pay, allowances, and pension structuresfor central government employees. These recommendations will take into account inflation, cost of living, and current economic indicators. While the earlier commissions were set up every 10 years, employee unions are now pushing for a shorter cycle ideally every 5 years to ensure salary adjustments happen more frequently and remain in line with market trends.
How Much Increase In Salary Can Be Expected?
As per early estimates, employees may see a salary hike between 20% to 30% under the 8th Pay Commission. In comparison, the 7th Pay Commission had resulted in a 14% to 23% salary increase. The new structure is expected to revise Pay Matrix slabs, bring changes to Grade Pay levels, and possibly introduce a more dynamic formula for future revisions. These updates will particularly benefit mid- and lower-level employees, where inflation has hit hardest.
What Will It Affect Pensioners?
Retired government employees are also likely to benefit substantially. Under the current system, pension is calculated based on the last drawn salary. However, the 8th Pay Commission may revise the pension formula, potentially introducing a more employee-friendly calculation that considers inflation and updated pay scales. This could mean higher monthly pensions and enhanced retirement benefits for millions of senior citizens.
When Will The 8th Pay Commission Be Set Up?
Insider reports suggest that the government may formally announce the 8th Pay Commission in late 2024 or early 2025. Once established, the commission usually takes around 18 to 24 months to finalize its recommendations. This places the likely rollout of the new pay structure somewhere in mid to late 2026, although implementation may vary depending on political and economic conditions.
Difference In The Dearness Allowance
Currently, central government employees receive 55% Dearness Allowance. However, the 8th Pay Commission may introduce a new DA calculation formula, designed to adjust faster with inflation. There are also discussions about merging DA into basic pay, which would not only increase monthly salaries but also boost long-term benefits like gratuity and pension. This structural change would ensure better financial security for both current employees and retirees.
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