8th Pay Commission update

Dear Sir,

To an un-starred question No 1347 dated 08 Dec 2025 of four Hon’ble MPs in Lok Sabha, the Hon’ble Minister of State for Finance Mr Pankaj Chaudhary furnished the following :- 

*Implementation Date*: The government has not finalized the effective date (like Jan 1, 2026); this decision will be made after receiving the Commission's recommendations.

*Funding*: Funds will be allocated in future budgets upon acceptance of recommendations; no specific outlay was mentioned.

What are the implications of the above information ?

*Date of Implementation*. The Govt of India retains the date of implementation till receipt the recommendations of 8th CPC in Jun 2027. This has never been done in the past Central Pay Commissions. (CPC). In fact, the Govt of India gives in its Terms of Reference (TOR), the date of implementation to enable the CPC to work out the likely expenditure on their own recommendations since they know the arrears are from next date of expiry of previous CPC. For example, 7th CPC submitted their report to Govt of India in Nov 2015. Therefore, they knew the period of arrears will be from Jan 2016 till the Govt of India approves the recommendations of 7th CPC which in fact took almost 18 months when Army Pay Rules came in 2017. They also assessed the DA or DR is going to be 125% in the period of Jan to Jun 2016. The likely burden on the Govt of India if it implements the recommendations of 7th CPC is around Rs 1 Lakh Crores as per expert bodies. But this time the Govt of India wants to weigh in the recommendations of 8th CPC and then announce the date of implementation. *If the date of implementation is not 01 Jan 2026, then the employees and pensioners of Central Govt will lose out on arrears*. Can the party in power in the centre afford to annoy the stake holders by reducing the arrears which are eagerly awaited? My own guess is the date of implementation will be still 01 Jan 2026 due to political considerations seeing how the announcement of 8th CPC helped the ruling party to gain power in Delhi State elections in Feb 2025 and in Bihar State Elections in Nov 2025.

*Funding of Likely Burden of 8th CPC*. The funds for 8th CPC will be allocated only on receipt of recommendations in Jun 2027. *That means no provision is made for any kind of interim relief in the budget of Financial Year 2026-27 and also 2027-28*. The employees and pensioners will get DA or DA as per 7th CPC scales i.e. 60% in Jan to Jun 2026 and then depending upon AICPN of Jul to Dec 2026 and Jan to Jun 2027. Since the inflation rate is below 2%, it is reasonable to expect the DA or DR in Jul to Dec 2026 will be either 2% or 3% and similar pattern appears for the period of Jan to Jun 2027. In the worst case the DA or DR is likely to be 64% or at the most 66% in the period of Jan to Jun 2027 which decides the fitment factor. If 8th CPC assesses the DA or DR by seeing the actuals in Jul to Dec 2026, which could be 1.64 or 1.66, they may as per past practice give a rise of 15% to 20%. The pay with DA in Jan to Jun 2027 may vary from 1.64 to 1.66 which the Govt will any case has to give. *On this if 8th CPC recommends 15% to 20%, the Fitment Factor will lie between 1.886 to 1.968*. The fancy figures of fitment factor of 2.68 or 3.00 or 3.25 which appears every day in the social media in YouTube Facebook and WhatsApp is only a figment of imagination and is not based on any relevant data.

The Govt of India in  6th CPC increased the fitment factor above that recommended by the CPC. If history repeats to win general elections of May 2029, and the ruling coalition govt wants to give another rise of 15% to 20% over what 8th CPC recommended, then the fitment factor can range between 2.16 to 2.39 which I feel is very unlikely. The Defence Acquistion Coucil wants to acquire 114 French fighter Rafale aircraft at a cost of Rs 3.25 lakh crores with production in India. Each of the Rafale aircraft costs us Rs 2,851 crores. Then, where is the money for employees and pensioners in 8th CPC?

You can make out your own assessment. 

If will not be surprised  if the fitment factor is kept as low as at  1.968 due to requirement of funds for modernization of Armed Forces, welfare programmes and developmental works. 

Brig CS Vidyasagar (Retd)

75695 13350

csvidyasagar@icloud.com