8th Pay Commission Big Update: Modi government likely to implement it by THIS date, salaries, bonuses, and pensions to increase by…

New Delhi: In a major development, the Narendra Modi-led Central government has officially announced the formation of the 8th Pay Commission along with its Terms of Reference (ToR). This paves the way for salary hikes, allowances, and pensions of Central government employees. According to reports, the commission will submit its recommendations to the government by April 2027. According to the reports, the 8th Pay Commission will be implemented by Diwali 2027.

It is important to note that the Modi government has appointed three members to the commission. Former Supreme Court Justice Ranjana Prakash Desai will serve as the Chairperson, Professor Pulak Ghosh will be a part-time member, and Pankaj Jain will serve as the Member-Secretary. The commission may also issue interim reports from time to time to provide early relief to employees.

Here are some of the key details:

  • The commission’s objective is to review the salaries, allowances, bonuses, gratuity, and performance-linked incentives (PLI) of employees and pensioners.
  • It will also ensure that there is no additional financial burden on the government and that financial balance is maintained.
  • The commission will also assess its impact on state governments and compare the salary structure with that of PSUs and the private sector to maintain parity.
  • The 8th Pay Commission will also reconsider bonuses, retirement benefits, gratuity, and the PLI (Performance Linked Incentive) system.
  • The previous 7th Pay Commission was implemented in 2016, resulting in an average salary hike of 14–16 percent.

How much could the salary increase?

According to estimates by financial institutions such as Kotak Institutional Equities and Ambit Capital, the fitment factor this time could range between 1.8 and 2.46. If the current basic salary is ₹18,000, then—

  • At a 1.82× factor, the new salary would be Rs 32,760, which means a 14 percent increase.
  • At a 2.15× factor, it would be Rs 38,700, a 34 percent increase.
  • At a 2.46× factor, it would be ₹44,280, a 54 percent increase.

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