The halfway around the clock of central government workers and retirees drawing near to the very end of the possible higher salaries and pensions in the years to come. As the inflation is seriously affecting the population and the cost of living is going up, the hype around the 8th Pay Commission is extremely high. This long-delayed change would mainly affect more than 50 lakh employees and 69 lakh retirees in a very positive way.
What is the 8th Pay Commission?
The 8th Central Pay Commission (CPC) evaluates the quantity of pay, allowances, and pensions of central government workers. It comes right after the 7th Pay Commission, which has its term ending on December 31, 2025.
The Union Cabinet gave its approval for its setup in January 2025. The notification of Terms of Reference was done on November 3, 2025. The commission is formed with a Chairperson, a part-time Member, and a Member-Secretary.
They are required to make their recommendations in 18 months, possibly with interim reports.
Latest Status as of December 2025
The parliament was informed about the commission’s establishment on December 8, 2025. The date of implementation is still undecided.
The commission’s timing to start is set at every 10 years, hence January 1, 2026, seems likely. Nevertheless, the earlier delays in the commission’s establishment suggest that it may continue into 2026.
There are currently no specific budgetary allocations made for this. The funds will be released after the recommendations have been made.
Understanding DA Merger Rumors
The Dearness Allowance (DA) is a subsidy introduced to help offset the loss of purchasing power due to inflation, it is revised every six months. The current DA is 58% (July 2025), and there is a possibility of a 2% increase to 60% in January 2026.
The workers’ unions are urging for the DA to be merged with the basic salary immediately, the last time the merger was done was before the 6th Pay Commission in 2004.
The Ministry of Finance stated in December 2025: there is no proposal for carryover merger before enforcement.
How DA Works in Pay Commissions
Normally, the new pay commissions fuse the already existing DA into the basic pay when implemented. At that time, the DA becomes zero but a new fitment factor is used for the revised salaries.
This has been the case once more, DS gentle, that is, the basic pay rises brings in the allowances and in the case of HRA and pensions, that is, they too increase.
| Aspect | Current (7th CPC) | Expected Under 8th CPC |
|---|---|---|
| DA Rate (Dec 2025) | 58% | Likely merged into basic pay |
| Post-Merger DA | Continues to rise | Resets to 0% |
| Basic Pay Impact | DA added separately | Increased via merger + fitment factor |
| Pension Calculation | Based on current basic + DA | Higher due to merged basic |
| Implementation Timeline | Ends Dec 31, 2025 | To be decided (possibly post-2026) |
Expected Benefits and Timeline
The revised salaries could lead to a major increase in the net salary of the employees. Pensions will also be increased as they are linked directly to the basic pay.
The commission includes different categories such as employees, All India Services, defense personnel, and others.
The DA changes will still be happening every 6 months until the old/new structure is finally activated.
What Employees Should Watch For
Keep yourself informed about the official announcements. The upcoming DA increase will be announced in March 2026.
The recommendations are anticipated by mid-2027, after which the final implementation will depend on government approval.
This reform is set to lighten up the economic burden over the people, amid changes in the economy.
