8th Pay Commission: How Many Employees Will Benefit, Is the Government Ready With Funds? Here Are All the Key Updates

The Central Government has confirmed that a massive number of employees and pensioners will be covered under the 8th Central Pay Commission (8th CPC). The government has clarified the estimated beneficiaries, the funding situation, implementation timeline, and the commission’s scope. However, it has also made it clear that there is currently no proposal to merge DA (Dearness Allowance) and DR (Dearness Relief) with basic pay.

These details were shared by Minister of State for Finance Pankaj Chaudhary in a written reply in the Lok Sabha on 8 December 2025.

Over 1.19 Crore Employees & Pensioners to Benefit

As per government data:

• 50.14 lakh central government employees are currently on the rolls.

• Nearly 69 lakh people are central government pensioners.

This means the 8th Pay Commission will directly impact around 1.19 crore serving and retired employees once it becomes operational.

Questions Raised in Parliament About Timeline, ToR & Funding

Several MPs, including N.K. Premachandran, Thanga Tamilselvan, Ganapathi Rajkumar P., and Dharmendra Yadav, sought clarity on:

• The implementation date of the 8th Pay Commission

• Finalising the Terms of Reference (ToR)

• Allocation of funds in the Union Budget

• Whether employee unions were consulted

• The government’s plans to address pension-related grievances

In response, the government stated that the implementation date will be announced later, and the commission is expected to submit its report within 18 months of its formation.

Government Assures Adequate Funding for 8th CPC

The Centre has said it will make all necessary financial arrangements to implement whatever recommendations are accepted from the 8th Pay Commission.
The government will also determine its internal processes and methodology to assist the commission in preparing its recommendations efficiently.

What Has Happened So Far?

The official Terms of Reference for the 8th Pay Commission were notified on 3 November 2025.
Since then, the commission has begun the process of examining:

• Basic salary structure

• Pension structure

• Allowances

• Other employee benefits

• Fitment factor revisions

The fitment factor plays a crucial role in determining the uniform upward revision of basic pay across all categories of employees.

Will Salary, Allowances & Pension All Be Reviewed? Yes.

The Finance Ministry has already clarified that the 8th CPC’s recommendations will cover salaries, allowances, pension revisions, and related issues.

MPs also asked whether the government was considering merging DA and DR into basic pay.

No Proposal to Merge DA or DR

The government clearly stated that there is currently no proposal to merge DA or DR into basic pay.
This clarification comes even as several employee unions have been demanding DA-DR merger ahead of the next pay commission.

Currently:

• DA and DR were increased from 55% to 58% effective 1 October 2025.

• The arrears for July–September 2025 were adjusted in the October salary.

• DA/DR revisions are done every six months based on the AICPI-IW index.

What Happens After the 7th Pay Commission Ends?

Normally, when a new pay commission is implemented:

• DA gets merged with the new basic pay

• DA resets to 0% and starts fresh accumulation

Since the 7th CPC ends on 31 December 2025, employees want clarity on whether DA will continue under the old formula or be paused until the 8th CPC takes effect.

Employee Union NC JCM’s Demands

The National Council (JCM) wrote to the Prime Minister on 15 November 2025, demanding amendments to the ToR.
Their demands include:

• Restoration of Old Pension Scheme (OPS)

• Revision of pension formulas

• Improvements in family pension rules

• Pension-friendly reforms

They also want:

• Commuted pension restored in 11 years instead of 15

• An additional 5% pension every five years

• At least 20% interim relief on existing basic pay and pension until the 8th CPC takes effect

Government Likely to Move Cautiously

Tax experts believe the government will take a measured approach to any interim relief.
While employee organisations argue that inflation and falling real incomes make relief essential, the Centre must also maintain fiscal discipline, especially with challenging deficit targets and upcoming elections.