The 8th CPC has made a proposal to alter the pay, allowances, pensions, and service conditions not only of the central government employees but also of the pensioners after almost ten years of the last revision done under the 7th Pay Commission. The year 2025 saw the government opening up the consultations: the bigwig departments like the Ministries of Defence, Home Affairs, and the Department of Personnel & Training — and state governments as well — were all asked to contribute their thoughts to the defining of the Terms of Reference (ToR).
What Is Likely To change: Fitment Factor, Basic Pay, Allowances & Pensions
- A “fitment factor” which is a central idea behind the new pay commission is nothing but a multiplier that is applied to the existing basic pay in order to find out the revised basic salary. Analyzing the market rumors (through the lens of multiple experts) the said fitment factor is expected to fall somewhere between 1.8 and a whopping 2.86.
- In case the upper end of the multiplier is taken into account, the minimum basic pay (considering the lowest pay grade) would be drastically increased.
- At the same time, the basic pay would take a leap, all the other allowances like the Dearness Allowance (DA), House Rent Allowance (HRA), and Travel Allowance (TA) etc would also get recalculated in the same ratio.
- The same goes with the pensioners: an increase in pension and associated benefits (including the Dearness Relief (DR) being the most common of the benefits) is being considered, which would then be in line with the new pay matrix.
What The Government Has Made Clear: No DA/DR Merger — At This Moment
The government (late 2025) has confirmed in parliament that a proposal to merge DA or DR with basic pay or pension under the 8th CPC is not being considered at all, notwithstanding the different expectations and demands from employee unions. This means that — notwithstanding a revision of salaries — DA/DR will probably be paid under the existing mechanism rather than be absorbed into the basic pay of the revised scale. The government’s decision not to merge but rather to keep the periodic DA/DR adjustment reflects a very careful and extremely responsible approach: balancing between the present as well as the future, i.e., short-term fiscal policy versus long-term sustainability.
When Might Changes Occur — And What’s Not Clear
If the process of the 8th CPC does not suffer any further delays, then its recommendations may come into effect in early 2026 or later. However, considering the delays in finalizing the ToR and the fact that the commission has not yet appointed its members, the implementation might be pushed beyond January 2026, possibly to 2026–27. In light of this uncertainty, it remains unclear how much of an increase in salary or pension will be granted and at what exact time. The only thing that remains firm is the fact that a thorough and comprehensive review is in progress.
What Employees And Pensioners Should Keep An Eye On
- Keep an eye on the official government notifications regarding the establishment of the 8th CPC and its final Terms of Reference.
- Be ready for a new pay matrix that might result in a sizable upward revision of the basic salary, along with changes in the structure and amount of allowances, pensions, and DA/DR.
- Acknowledge that — at this point in time — the merger of DA/DR is not something being considered; thus, real benefits will probably depend on fitment factor and revised allowances.
- Recognize that the timing is still unclear: salary revisions might take a while, and the benefits might only come after formal cabinet and government approvals.