New Delhi, January 11: The long-awaited 8th Pay Commission has now been formally constituted, bringing clarity for millions of central government employees and pensioners who have been awaiting a revision in pay and allowances amid rising inflation.

The Union Government notified the Terms of Reference (ToR) for the 8th Central Pay Commission in November 2025, officially setting the process in motion nearly a decade after the implementation of the 7th Pay Commission in January 2016. 8th Pay Commission Update: Why Salary Hikes Are Yet to Be Notified and What It Means for DA.

Lessons From 6th and 7th Pay Commissions

The 6th Pay Commission (implemented in 2006) recommended a fitment factor of 1.86, resulting in an average salary increase of about 20 percent. The 7th Pay Commission, effective from January 2016, raised the fitment factor to 2.57, pushing the minimum basic pay from INR 7,000 to INR 18,000. 8th Pay Commission Salary Hike: Will Junior Employees or Senior Officers Gain More From January 2026?

However, employee unions have consistently argued that pay revisions under the 7th CPC failed to keep pace with inflation over the years, leading to a significant erosion in real wages.

What to Expect From the 8th Pay Commission

According to employee federations and early projections, the 8th Pay Commission may recommend a fitment factor of up to 3.68. If adopted, this could increase the minimum basic salary from INR 18,000 to around INR 26,000.

Apart from basic pay, the commission is examining:

• Dearness Allowance (DA)

• House Rent Allowance (HRA)

• Other service-related allowances

• Pension and retirement benefits

The objective is to align government compensation with current economic realities, inflation trends and the Consumer Price Index.

When Will New Pay Be Implemented?

While the 8th Pay Commission is already in place, it has been given 18 months from the notification of its ToR to submit its final recommendations. This means the report is expected sometime in 2027.

Although 1 January 2026 remains the notional base date, actual implementation will depend on Cabinet approval. As seen in previous pay commissions, revised salaries may be implemented later with retrospective effect and arrears.

Current Status in January 2026

As of now:

• The 8th Pay Commission is functional

• Stakeholder consultations are underway

• Existing pay and allowances continue under the 7th CPC framework

• DA continues to rise separately until the new pay structure is approved

Employee organisations are pressing for early implementation to protect purchasing power amid sustained inflation.

Why the 8th Pay Commission Matters

The 8th Pay Commission will impact over five crore serving employees and pensioners, shaping government salaries, pensions and allowances for the next decade. Its recommendations will play a crucial role in balancing fiscal responsibility with the need to safeguard real incomes.

All eyes are now on the commission’s deliberations, which will determine the final scale of pay hikes and the future structure of central government compensation.

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(The above story first appeared on LatestLY on Jan 11, 2026 11:48 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).