Major update on the 8th Pay Commission: 11.9 million employees and pensioners will benefit

8th Pay Commission: The central government stated that approximately 11.9 million employees and pensioners will benefit when the 8th Pay Commission is implemented. Questions were raised in Parliament regarding its implementation date, ToR, funding, and DA-DR merger, while the government clarified that the commission will submit its report within 18 months.

8th Pay Commission: The central government stated on Monday that there are currently approximately 50.14 lakh government employees and approximately 69 lakh pensioners in the country. This means that approximately 11.9 crore current and former employees will benefit when the 8th Central Pay Commission is implemented. MPs N.K. Premachandran, Thanga Tamilselvan, Ganapathy Rajkumar P., and Dharmendra Yadav raised questions about the expected implementation date of the 8th Pay Commission, its Terms of Reference (ToR), budget provisions, discussions with employee unions, and the government's strategy on pension-related issues. The government clarified that the date of implementation of the Commission will be decided later, and the Commission will submit its report within 18 months of its formation.

Clarity on Funding and Process

The Central Government assured that adequate budgetary provisions will be made to implement the accepted recommendations of the 8th Pay Commission. Additionally, the government will establish its own processes and procedures for the Commission to ensure timely and practical recommendations. This sends a message to employees and pensioners that the process of reforming the pay-pension structure is moving forward.

What has happened so far

The 8th Pay Commission's Terms of Reference notification was issued on November 3, 2025, and more than 40 days have passed. The Commission will evaluate the basic pay structure, pensions, allowances, and other benefits. It will also revise the fitment factor, which is considered the most important element of the new pay structure, as it determines the proportionate increase in employees' basic pay. The Finance Ministry has already clarified that the Commission will provide detailed recommendations on all issues related to salaries, allowances, and pensions.

The government's stance on the merger of DA and DR

The government stated clearly in the Lok Sabha that there is currently no proposal to merge dearness allowance (DA) and dearness relief (DR) with the basic pay. Many employee unions have long demanded the merger of DA and DR, but the government has not taken any steps in this direction. The government stated that DA and DR have been increased from 55 percent to 58 percent, effective October 1, 2025. The arrears for July to September 2025 will be paid with the October salary. DA and DR are calculated every six months based on the AICIP-IW index.

What will happen after the 7th Pay Commission?

Usually, when a new Pay Commission is implemented, the existing DA is absorbed into the new basic pay, and the DA cycle starts again from zero. Since the 7th Pay Commission's term expires on December 31, 2025, employees are curious to know whether DA will continue as per the current formula or will be frozen until the 8th Pay Commission's recommendations are implemented. The government has not yet given any final indication on this, leading to some uncertainty among employees.

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