8th Pay Commission Approved Ahead of Budget 2025: Major Salary Revision for Central Government Employees

In a landmark move, the Union Cabinet, under the leadership of Prime Minister Narendra Modi, has sanctioned the 8th Pay Commission for pay scales reformation in the Central government employees and revaluation of allowances of pensioners. Union Minister Ashwini Vaishnaw on Thursday, 16 January 2025 made the official announcement, marking a new turn for millions of workers and pensioners in the country.

What the 8th Pay Commission means for Employees

The 8th Pay Commission is going to increase the Central government employee’s salary significantly, along with changes in the Dearness Allowance (DA). This move comes as a response to long-time demands made by central government employee unions and retired officials over pay scale revision to account for inflationary and other economic indicators.

Besides, the commission will consider pensions and allowances for retirees so that they also enjoy the new economic thinking. The date for the establishment of the commission has not been announced, but the Union Minister said it will be formed in 2026, and the recommendations will take effect from January 1, 2026.

Minister Ashwini Vaishnaw said, “For your information, our Prime Minister has sanctioned the setting up of the 8th Central Pay Commission for all Central government employees.” He further clarified that the commission will consist of a chairman and two members, whose appointments will be finalized shortly.

This 8th Pay Commission has been planned long in advance to implement without a hitch. Their recommendations would be available well before the completion date of the 7th Pay Commission that expires on 31 December 2025. Consultations with stakeholders at state and central governments also would be conducted, to suit the main objectives of governance.

The 7th Pay Commission, which was formed in 2016, brought in many changes to the pay scale of government employees:

• Fitment Factor: The unions demanded a fitment factor of 3.68, but the government accepted a factor of 2.57.
• Minimum Basic Pay: Increased from ₹7,000 (6th Pay Commission) to ₹18,000 per month.
• Minimum Pension: Increased from ₹3,500 to ₹9,000 per month.
• Maximum Pay and Pension: Maximum salary was fixed at ₹2,50,000 per month, whereas maximum pension went up to ₹1,25,000 per month.

Seven pay commissions have been constituted after India’s independence for reevaluating the scales, allowances, and perks for government employees. This has implications for more than 49 lakh Central government employees and about 65 lakh pensioners.

Pay commissions are typically formed every decade, and these commissions evaluate several economic indicators such as inflation to determine fair compensation. Most state-owned organizations also follow these recommendations, thereby amplifying their reach and significance.

The approval of the 8th Pay Commission ahead of Budget 2025 clearly indicates that the government is serious about fair compensation for its employees and retirees. The announcement has been welcomed with hope by government workers and unions, who are hopeful of favorable revisions that align with rising economic demands.

The nation waits for further details on the commission’s setup and recommendations, but it is sure that this move will play a crucial role in shaping the financial futures of millions across India.