8th Pay Commission: Only 21 days left in the new year, when will the increased salary be received?

8th Pay Commission: The year 2025 is now on the verge of ending. Amidst the preparations for the New Year celebrations, one question is resonating most strongly in the minds of millions of central government employees and pensioners across the country: When will they finally receive the gift of the Eighth Pay Commission? Will their salaries increase in the new year, which begins in 21 days?

When will the salary increase?
A common perception regarding pay commissions has always been that regardless of when the recommendations are made, they are implemented retrospectively. Employees had high hopes that even if the process took time, the benefit of the increased salary would be considered effective from January 1, 2026, and they would be paid the arrears. This date was nothing less than a deadline for the employees.

However, the statement given by the Minister of State for Finance in Parliament has somewhat dampened these hopes. The government has clearly stated that no final decision has yet been taken on the "effective date" of the Eighth Pay Commission. This directly means that the government has not yet officially approved the January 1, 2026 date.

The matter could drag on until 2027
For a salary increase, the commission's report must first be submitted. It is important to understand this process. The Ministry of Finance had issued the 'Terms of Reference' (ToR) for the commission on November 3, 2025. This sets the direction for the commission's work. Looking at government rules and past procedures, it takes approximately 18 months from the date of notification for the commission to prepare and submit its detailed report.

If we calculate this timeframe, the commission's final report is likely to arrive by mid-2027. This means that employees who were thinking that their pockets would be heavier at the beginning of the new year may have to wait a little longer with patience. Only after the report is submitted will the government approve it in the Cabinet, and only then will the increased salary reach their accounts.

How much will the salary increase? The entire salary increase hinges on the 'fitment factor'. You may recall that this factor was set at 2.57 during the 7th Pay Commission. Now, experts believe that in the 8th Pay Commission, it could be increased to 2.86 or even higher.

If the government accepts this recommendation, the impact will be significant. According to estimates, there could be a substantial increase of approximately 30% to 34% in the old basic salary and pension. Moreover, the Dearness Allowance (DA/DR) will also be adjusted based on the new basic pay, providing considerable relief in take-home pay. In this era of rising inflation, this increase will be nothing short of a lifeline.

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