8th Pay Commission Announced: Minimum Salary for Central Government Employees Likely to Exceed Rs.40,000

The Union Cabinet has approved the formation of the 8th Pay Commission, bringing potential relief to central government employees with expected salary hikes. Experts suggest that the minimum basic salary could rise beyond ₹40,000 per month, accompanied by perks, allowances, and performance pay.
Salary Hike and Fitment Factor
Neeti Sharma, CEO of TeamLease Digital, shared insights on the expected changes:
“For the 8th Pay Commission, a fitment factor between 2.6 and 2.85 is speculated, which could increase salaries by 25–30%. This would proportionately raise pensions as well. The minimum basic salary is anticipated to exceed ₹40,000.”
Currently, under the 7th Pay Commission, the minimum basic salary is ₹18,000 per month, excluding additional benefits like dearness allowance (DA), house rent allowance (HRA), and transport allowance (TA). When these are factored in, the total monthly salary rises to approximately ₹36,020.
In comparison, the 7th Pay Commission introduced a fitment factor of 2.57, resulting in an average salary hike of 23.55%. The 6th Pay Commission used a fitment factor of 1.86, increasing the basic minimum salary from ₹7,000 to ₹18,000.
Implementation Timeline
According to reports, the 8th Pay Commission’s recommendations are expected to take effect from January 1, 2026. Union Minister for Information and Broadcasting, Ashwini Vaishnaw, emphasized the importance of initiating the process early.
“The 7th Pay Commission’s term concludes in 2026. By forming the 8th Pay Commission now, there is sufficient time to implement recommendations before the transition,” Vaishnaw said.
He also announced that the chairman and two members of the commission will be appointed soon.
Why the 8th Pay Commission is Significant
The 8th Pay Commission will address inflation, rising living costs, and the disparity between public and private sector salaries. Neeti Sharma stated, “This revision ensures government salaries and pensions stay competitive. It also boosts disposable income, stimulating consumption and contributing to the economy.”
Periodic revisions in pay and pensions highlight the government’s commitment to its workforce, reflecting an effort to keep compensation aligned with evolving economic realities.
Fiscal Implications
Aditi Nayar, Chief Economist at ICRA Ltd, explained that while the 8th Pay Commission’s recommendations are unlikely to affect fiscal metrics in FY 2026, they should be integrated into long-term fiscal planning and the Finance Commission’s recommendations.
The last major pay revision under the 7th Pay Commission led to a ₹1 lakh crore expenditure increase in FY 2016-17. The 8th Pay Commission is expected to bring significant financial benefits, further empowering government employees and contributing to economic growth.