8th Pay Commission Update: The announcement of the Eighth Pay Commission has come with major developments from the government. Its implementation will result in significant changes for the salary, allowances, and pension of central government employees and pensioners. It appears some progress has been made, as the Finance Ministry seems to be in the early stages of discussions regarding the CPC formation. During the monsoon parliamentary session of Lok Sabha, Minister of State for Finance Chaudhary made some pertinent remarks on the issue.Minister of State for Finance clears the pictureAs per the PTI report, the Finance Ministry has started discussions with major departments, ministries, as well as the state governments concerning the Eighth Pay Commission, which includes the Ministry of Defense, Ministry of Home Affairs, and the Ministry of Personnel and Training, alongside several state governments. Chaudhary appears to be optimistic regarding the inputs from the key stakeholders, as evidenced by his statements in the Lok Sabha, explaining that the formal announcement of the Commission will lead to the appointment of its chairman and members, although to be fair, no names have been shared yet.When is the 8th Pay Commission Expected to be Operationalized? While the official recommendations for the 8th Pay Commission have yet to be made, it appears that they will be executed based on the model of the preceding commissions. It is interesting to note that the 7th Pay Commission was set up in February 2014, yet was only executed in January of 2016. In this context, it is being suggested that the estimations for the 8th Pay Commission would be fully operationalized by January 1, 2026. Addressing the question of the new pay commission, Pankaj Chaudhary added that it would only be executed post the recommendations from the Eighth Central Pay Commission have been made and accepted by the government.65 lakh pensioners and 50 lakh employees to gain from itThe number of central employees who will be benefitted by the implementation of the 8th Pay Commission will be 50 lakh and 65 lakh pensioners will also be benefitted. But this also means that there will be no change to the salary and pension structure of the employees till the new pay commission gives its recommendations and the government accepts it. On the other hand, the employees will be able to gain from the increase of DA twice a year. DA should increase by 4%It should be highlighted that the central government does increase the salary of employees and pensioners by means of dearness allowance (DA) and it is done once every 6 months. The DA of the 8th Pay Commission is live to AICPI-IW and the All India Consumer Price Index for Industrial Workers. The dearness allowance is usually revised in the months of January and July each year.When the 8th Pay Commission is set in motion, it is anticipated that the DA assigned to employees and pensioners will be capped at 60%. Recent updates regarding this show that the AICPI-IW index which was 143 in March 2025 has now reached 144 in May. In this regard, DA-DR may rise 3 to 4 percent. This will be Applicable from July 1st. The government is likely to make the announcement during September-October. DA can be increased by 3-4% with further government review When the 7th Pay Commission was issued in 2016, the dearness allowance was set at 0%. However, it increased to 55% by January 2025. In the July forecast, if a DA raise of 3% is granted, the total is likely to reach 58%. During the review set for January 2026, there is a further projected increase of 2% to 60% in total.
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