Mumbai, July 26: The rollout of the 8th Central Pay Commission (CPC) may not happen before late 2026 or early 2027, according to a report by Kotak Institutional Equities. While the commission was announced in January 2025 to revise salaries and pensions for central government employees and retirees, the government is still in the process of finalising the Terms of Reference (ToR) and has not yet appointed its members.

Kotak expects the implementation timeline to follow the pattern of previous pay commissions. Historically, both the 6th and 7th CPCs took about 1.5 years to submit recommendations, followed by another 3-9 months for Cabinet approval and rollout. 8th Pay Commission Salary Hike Update: Lower Fitment Factor May Limit Real Growth to 13%, Unions Demand Parity With 7th CPC Structure.

Minimum Pay May Rise to INR 30,000 Under 8th Pay Commission

The report estimates that the minimum pay level may rise from the current INR 18,000 to around INR 30,000 per month, implying a fitment factor of 1.8 and a real salary increase of approximately 13%. This revision will directly benefit around 3.3 million central government employees, with Grade C staff, comprising nearly 90% of the workforce, expected to gain the most.

The fiscal cost of implementing the 8th CPC is projected at 0.6–0.8% of GDP, translating to an additional INR 2.4-3.2 lakh crore in government expenditure. While such pay hikes have historically provided a short-term boost to consumption, particularly in sectors like automobiles and consumer staples, the effects tend to fade within a year. 8th Pay Commission Update: When Will Central Government Employees Get 30–34% Hike? Check Details.

On the savings front, Kotak forecasts that part of the additional income could flow into physical and financial assets, including equities and bank deposits. This could lead to incremental savings of INR 1-1.5 lakh crore during the next pay hike cycle.

Discussions between the central government, ministries, and states are ongoing, and the final salary revisions will be implemented only after the commission submits its report and receives approval. The government conducts such salary reviews every ten years to adjust for inflation and rising living costs.

(The above story first appeared on LatestLY on Jul 26, 2025 05:39 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).