8th Pay Commission Salary Hike: How Much Pay May Increase And What Employees Can Expect
The 8th Pay Commission is expected to significantly raise household incomes and spur consumer spending across India. Around 11.2 million central government employees and pensioners are likely to benefit from revised salaries and pensions, which economists say could inject fresh momentum into the economy.
New Delhi, February 6: The 8th Pay Commission is expected to significantly raise household incomes and spur consumer spending across India. Around 11.2 million central government employees and pensioners are likely to benefit from revised salaries and pensions, which economists say could inject fresh momentum into the economy.
The new pay panel will replace the 7th Pay Commission, which has been in effect since 2016. Its recommendations are expected to reshape basic pay, allowances and pensions, influencing both spending and savings patterns nationwide.
Bigger Pay Hike Likely This Time
The 7th Pay Commission delivered a relatively modest 14% increase in basic pay, excluding allowances. Despite a fitment factor of 2.57, the actual hike remained limited as dearness allowance was reset to zero when the commission began, according to Ambit Institutional Equities. 8th Pay Commission Salary: Will Minimum Basic Pay Reach INR 51,480 Under 8th CPC? Check Expected Salary Hike and Fitment Factor Here.
This time, expectations are higher. Ambit estimates a 30 to 34% increase in wages and pensions could be on the table. Such a revision would be far larger than the previous one and could account for nearly 15.5% of total government expenditure. 8th Pay Commission Latest News: How Much Fitment Factor Is Expected in the 8th CPC? Check Details.
Impact On Government Finances
The Centre is estimated to incur an additional expenditure of INR 1.8 trillion once the new pay structure is implemented. This will add to the impact of income tax cuts announced for FY26, which are already expected to leave more disposable income with households.
State governments are also likely to follow the Centre’s move, as seen in earlier pay commissions. This could push up state spending by at least 0.5% of their gross state domestic product.
Lessons From The 7th Pay Commission
Under the 7th Pay Commission, the minimum basic pay was raised to INR 18,000 from INR 15,750. While the increase appeared significant on paper, the actual rise in salary worked out to 14.3%. With allowances included, overall pay increased by about 23% in the first year.
This experience has shaped expectations that the 8th Pay Commission could be more generous to better support consumption.
What Could Change In Salaries
Ambit said the government may consider a range of fitment factors based on past pay panels. The likely range, it noted, could be between 1.83 and 2.46.
CA Manish Mishra, Founder of GenZCFO, said the fitment factor could be higher, potentially ranging from 1.9 to 2.8 or even 3.0, depending on fiscal conditions.
Ambit added that if the current basic pay is INR 50,000 and dearness allowance rises to about 60% by the end of 2025, salaries could still see a minimum 14% increase even at the lower end of the revision.
Mishra also said that arrears are likely to be calculated from January 1, 2026, the date marking the end of the 7th Pay Commission, even if actual payments are made later after approvals.
Overall, the 8th Pay Commission is expected to play a key role in lifting incomes and boosting consumption. While final decisions will depend on timelines and clearances, the scale of the proposed hike points to a meaningful boost for households and the broader economy.
(The above story first appeared on LatestLY on Feb 06, 2026 03:27 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).