8th Pay Commission Implementation Still Uncertain: Finance Ministry Clarifies Timeline in Parliament

The long-awaited 8th Pay Commission continues to be a major topic of discussion among more than 50 lakh central government employees and nearly 69 lakh pensioners. For months, speculation has circulated that the new pay commission could come into effect from 1 January 2026. However, the central government has now clarified the status of its implementation, putting an end to the assumptions surrounding its rollout.

In a written reply to the Lok Sabha on 8 December 2025, Minister of State for Finance Pankaj Chaudhary stated that no final decision has been taken yet regarding the implementation of the 8th Pay Commission from 1 January 2026. His statement marks the first official clarification after growing expectations among employees about the possible timeline.

Government Yet to Decide the Implementation Date

Responding to a parliamentary question, the minister said the government has not finalized any implementation date for the commission. He added that the official date of effect will be determined by the government in due course.

The minister also confirmed that the 8th Pay Commission has been formally constituted, and its Terms of Reference (ToR) were notified on 3 November 2025. This announcement comes at a time when discussions were gaining momentum that the new pay structure might be introduced from the beginning of 2026, along with the possibility of arrears.

Some earlier reports had even suggested that the government could delay the implementation to financial year 2028, while still providing arrears from January 2026. But the Finance Ministry’s latest response indicates that no such timeline has been finalized.

Commission to Submit Report in 18 Months

According to the Finance Ministry, the 8th Pay Commission will submit its recommendations within 18 months from the date of its formation—meaning the report is expected sometime around mid-2027.

After receiving the commission’s report, the central government will examine the suggestions and then decide how and when to implement them. The Ministry also stated that required budgetary provisions will be made once the government approves the recommendations.

Importantly, the government clarified that there is no proposal to merge Dearness Allowance (DA) and Dearness Relief (DR) with basic pay—a move that many employees had hoped would help increase their salaries significantly.

Economic Advisory Council Perspective

Adding another dimension to the debate, Neelkanth Mishra, a member of the Prime Minister’s Economic Advisory Council (EAC-PM), recently shared his analysis regarding the financial impact of the 8th Pay Commission.

He estimated that if the commission is implemented around FY 2028, the combined financial burden on the central and state governments could exceed ₹4 lakh crore.

Moreover, if the government decides to pay five quarters of arrears, the total impact may rise to nearly ₹9 lakh crore. This substantial cost, he said, could influence the government's decision on the implementation timeline.

What Employees Should Expect Next

While the official formation of the commission is seen as a positive step, the government’s clarification indicates that employees may have to wait longer to know the actual implementation date.

Key takeaways include:

• No final decision yet on implementation from 1 January 2026

• Commission’s report expected by mid-2027

• Government will decide rollout after reviewing recommendations

• No DA-DR merger into basic pay as of now

• Financial implications may influence the timeline

As lakhs of employees and pensioners await a salary revision, the coming months will be crucial in determining how soon the 8th Pay Commission becomes a reality.