In a significant step, the Union Cabinet led by Prime Minister Narendra Modi on January 16, 2025 approved the constitution of the Eighth Pay Commission. The decision, taken just before the Delhi Assembly elections, promises major revisions in the pay structure of over 50 lakh central government employees and 65 lakh pensioners.
Sharing the announcement on X (formerly Twitter), Prime Minister Modi wrote, “The Cabinet’s decision on the Eighth Pay Commission shows our commitment to improving the lives of government employees. Their dedication contributes to building a prosperous India.”
The announcement comes after a significant development after the dearness allowance (DA) for central employees was increased by more than 50% in July 2024, making it 53% of basic pay. While the exact salary hike under the new commission is yet to be revealed, the fitment factor is estimated to have increased from 2.57 to 2.86.
The Pay Commission is expected to make significant changes in allowances, including House Rent Allowance (HRA), Transport Allowance (TA) and Performance-related Allowances. Historically, it takes about two years to implement Pay Commission recommendations. The 7th Pay Commission was set up in February 2014 and its recommendations were implemented in January 2016.
The 8th Pay Commission has raised hopes for better salaries and allowances, but officials are yet to announce a detailed timetable. The upcoming reforms are expected to balance financial responsibility with meeting the needs of public sector employees, strengthening their contribution to the country’s development.