8th Pay Commission Brings Relief to 1 Crore Employees and Pensioners: Government Confirms Pension Revision

The long wait for clarity is finally over for nearly one crore central government employees and pensioners. After weeks of speculation, concerns, and repeated appeals from unions, the government has officially confirmed that the 8th Pay Commission will include pension revision in its mandate. The statement, issued by the Ministry of Finance in the upper house of Parliament, has brought a wave of relief across the workforce and the retiree community.

The confirmation came in response to a question raised in the Rajya Sabha, where Minister of State for Finance Pankaj Chaudhary clarified that the 8th Pay Commission has been assigned to review and recommend changes not only in pay and allowances but also in pensions. This clarification was crucial, especially after several employee and pensioner associations had written to the government demanding that pension reforms be clearly included in the Terms of Reference (ToR). With the government’s statement now on record, there is no ambiguity left regarding pension revision.

Pension Revision Is Confirmed Under 8th Pay Commission

For weeks, a major point of confusion among employees was whether pension updates would be part of the upcoming commission’s scope. The government has now clearly stated that pension recommendations are included, ensuring that pensioners are not left out of the upcoming reforms. With this, the 8th Pay Commission’s role becomes more comprehensive, covering the financial well-being of both active employees and retirees.

Will DA Be Merged With Basic Pay? Government Says No

One of the most significant questions raised by employees was whether Dearness Allowance (DA) would be merged into the basic salary. Many unions have consistently demanded that when DA crosses 50%, it should be absorbed into basic pay to simplify salary structure and improve financial benefits.

However, the government has categorically denied this possibility for now. Minister Pankaj Chaudhary informed Parliament that there is currently no proposal to merge DA with basic pay. This clarification ends speculation on the matter, although it may disappoint some employee groups that have long supported this demand.

8th Pay Commission Formally Constituted

The government officially notified the constitution of the 8th Pay Commission on 3 November 2025. The commission now has an appointed Chairperson, selected members, and clearly defined Terms of Reference. These ToR will guide the panel in examining salary structures, allowances, pensions, systemic improvements, and other key financial components affecting the central government workforce.

With its formation complete, the next step is for the commission to begin detailed analysis and consultations with stakeholders. The final report will determine how salaries, pensions, and allowances evolve in the coming years.

What This Means for Employees and Pensioners

Based on the government’s announcement and the formal constitution of the commission, here is what central staff and pensioners can expect:

• Pension revision is now guaranteed, offering significant relief for over 70 lakh pensioners.

• Potential changes in pay structure, aimed at addressing inflation, expenses, and long-term financial sustainability.

• Updated rules for allowances, which may undergo rationalisation or restructuring.

• A more balanced compensation framework, potentially benefiting both current employees and retirees.

Conclusion

The confirmation from the finance ministry marks an important milestone in the rollout of the 8th Pay Commission. While the government's refusal to merge DA with basic pay may not align with union expectations, the assurance of pension revision and the commission’s formal establishment signals progress.

Employees and pensioners can now look forward to systematic updates in pay, allowances, and pension systems, with the commission expected to deliver reforms that reflect today’s economic realities and future needs.