In a major step toward a comprehensive salary overhaul, the National Council of the Joint Consultative Machinery (NC-JCM) formally submitted its memorandum to the 8th Pay Commission on April 13. The proposal advocates for a significant restructuring of central government pay scales, including a record minimum basic pay of INR 69,000. If accepted, these changes would impact over 50 lakh employees and 68 lakh pensioners, setting a new benchmark for public sector compensation in India.

Key Demands: The 3.83 Fitment Factor Multiplier

The centrepiece of the unions' proposal is a 3.83 fitment factor, which serves as the multiplier to transition from the current 7th Pay Commission levels to the new structure. Under the 7th CPC, a multiplier of 2.57 was used to set the current minimum pay at INR 18,000. 8th Pay Commission: Will Central Government Employees Get DA Arrears From January 2026?

Staff representatives argue that a higher multiplier is necessary due to the rising cost of living, with the proposed INR 69,000 figure based on the "Aykroyd Formula", which calculates the minimum expenditure required for a family of five. Other major demands include:

  • Annual Increments: A jump from the current 3 to 6 per cent.

  • House Rent Allowance (HRA): A minimum slab of 30 per cent, reaching up to 40 per cent for X-category cities.

  • Pension Reform: Restoration of the Old Pension Scheme (OPS) with monthly payouts at 67 per cent of the last drawn pay.

Dearness Allowance Update: Rate Hits 60 Per Cent

Parallel to the long-term pay commission discussions, the Union Cabinet approved a 2% increase in Dearness Allowance (DA) and Dearness Relief (DR) on Saturday, April 18. This hike brings the total DA to 60% of basic pay, effective retrospectively from January 1, 2026. While DA is currently a separate allowance, it is standard practice for a new Pay Commission to merge existing DA into the basic pay upon implementation. However, the government has clarified that until the 8th CPC is officially notified, DA will continue to be revised twice annually under the current system.

8th Pay Commission Implementation Timeline and Arrears

The 8th Pay Commission was officially constituted on November 3, 2025, with a reference date of January 1, 2026, for its new pay scales. Because the commission typically takes 18 to 24 months to finalise its recommendations, a final notification is not expected until mid-2027. Employees will continue to receive their current salaries under the 7th CPC in the interim. Once the 8th CPC is implemented, the revised salaries will be calculated retrospectively from the 2026 start date, and the difference will be paid out as lump-sum arrears. DA Hike Update: Cabinet Approves 2% Increase in Dearness Allowance Ahead of 8th Pay Commission.

Component 7th CPC (Current) 8th CPC (Proposed)
Minimum Basic Pay INR 18,000 INR 69,000
Fitment Factor 2.57 3.83
Full Pension Rate 50 per cent of last pay 67 per cent of last pay
Family Pension 30 per cent of last pay 50 per cent of last pay

Pensioners: OPS vs UPS

A significant portion of the NC-JCM memorandum focuses on social security for retirees. While the government introduced the Unified Pension Scheme (UPS) on April 1, 2025, as a middle-ground between the market-linked NPS and the fixed OPS, unions remain steadfast in their demand for a full return to the Old Pension Scheme.The memorandum also suggests increasing the maximum gratuity limit from INR 25 lakh to INR 75 lakh and reducing the pension commutation restoration period from 15 years to 11 years.

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(The above story first appeared on LatestLY on Apr 20, 2026 07:58 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).