Indian Economy : The 8th Pay Commission Could Change Everything for Lakhs of Families

Discussions around the 8th Pay Commission are gaining momentum, bringing a wave of anticipation for millions of central government employees and pensioners. With the 7th Pay Commission's recommendations nearing their ten-year mark, signs point to a new set of salary structures being implemented, likely from January 1, 2026.This move is expected to impact the salaries and pensions of over one crore people, including approximately 49 lakh employees and 65 lakh pensioners. The government traditionally forms a new pay commission well before the previous one's term ends to allow enough time for review and implementation.What could the salary hike look like?A key element in the new pay structure is the "fitment factor," a multiplier used to calculate the revised basic pay.While nothing is official yet, there's a lot of talk about what this number could be. Projections for the fitment factor range from 1.83 to 2.86.To give you an idea, the 7th Pay Commission used a fitment factor of 2.57, which raised the minimum basic salary from₹7,000 to₹18,000 If the higher end of the new projections—say, a fitment factor of 2.86—is approved, the minimum salary could see a significant jump from the current₹18,000 to over₹51,000.When the new commission's recommendations are enforced, the Dearness Allowance (DA) is expected to be merged into the basic pay and reset to zero. Allowances such as House Rent Allowance (HRA) and Travel Allowance (TA) will then be recalculated based on the new, higher basic pay.What does this mean for pensioners?Pensioners are also set to benefit significantly from the 8th Pay Commission. Their pensions will be revised based on the new pay structures. For example, the minimum pension, which was set at₹9,000 under the 7th Pay Commission, could increase to over₹25,000 if a fitment factor of 2.86 is applied.When will it happen?The target implementation date is January 1, 2026. Although the process of forming the commission, reviewing its suggestions, and finalizing the details might take time, any delays in implementation are usually compensated with arrears paid retroactively from the effective date.Employee unions have been urging the government to expedite the formation of the commission to ensure there are no delays. The government has confirmed that consultations with state governments are underway.