8th Pay Commission update: In a major relief for over 50 lakh Central government employees and more than 69 lakh pensioners the Union Cabinet led by Prime Minister Narendra Modi approved the Terms of Reference (ToR) for the 8th Pay Commission earlier this month.

However unlike the 7th Pay Commission the ToR for the 8th Central Pay Commission (8th CPC) does not provide for pension revision raising fears that around 6.9 million central pensioners may be excluded from the scope of 8th CPC recommendations.
Why pensioners may be excluded from 8th CPC?
According to the central government the ToR for the 8th Pay Commission differ from those of the 7th Pay Commission which provided for pension revisions. However there is no such provision in the 8th CPC raising doubts about whether pensioners will receive benefits of 8th Pay Commission recommendations once they are implemented.

Notably the Centre has not explicitly mentioned that pensioners will be excluded from 8th Pay Commission and concrete details about the new salary structure of central government employees and retirees will only be known once the Commission submits its recommendations which is expected to be around 18 months if we go by precedent.
8th CPC will review salaries allowances of these employees
As per available details the 8th Pay Commission will review the salaries and allowances of the following groups of central employees

Central Government Employees: Industrial and Non-Industrial
Employees belonging to All India Services
Personnel attached to the Defence Forces
Employees of Union Territories
Officers and employees of the Indian Audit and Accounts Department
Members of regulatory bodies established under Acts of Parliament except RBI
Officers and employees of the Supreme Court
Officers and employees of the High Court whose salaries are borne by the Union Territories
Judicial officers of subordinate courts in Union Territories

Will pensioners get a major hike under 8th CPC?
While the status of pensioners remains doubtful due to not being mentioned in the 8th Pay Commission ToR experts believe that retirees if included may witness a major hike in their pensions when the recommendations are implemented.

The new pension structure akin to salaries of in-service central government employees will be determined by Fitment factor which will be confirmed after the 8th Pay Commission recommendations are approved by the Union Cabinet.

The key to finding out the salary and pension hike is the fitment factor which was 2.57 in the 7th Pay Commission and based on estimates could be in the range of 1.86 to 2.57 for the 8th CPC.

According to experts if the 8th Pay Commission recommendations are in line with previous CPCs a significant hike is expected in salaries and pensions and many estimated that retirees could be the biggest beneficiaries as monthly pension could be doubled based on the current fitment factor estimates.
When will 8th Pay Commission be implemented?
If we go by the implementation of previous pay commissions the government usually takes about 18 to 24 months to implement the recommendations of the commission. Thus its unlikely that 8th Pay Commission would be implemented before mid-2027 while reports suggest that the next CPC implementation might be pushed back to early 2028.

As per a report by Kotak Institutional Equities 8th Pay Commission might be implemented in 2026 or early 2027.

On November 3 Prime Minister Narendra-led Union Cabinet approved the terms of reference (ToR) of the 8th Pay Commission which will benefit 50 lakh central government employees and 69 lakh pensioners and will have implications on the emoluments of the staff of state governments.

The ToR of the commission was approved by the Cabinet about nine months after it gave an in-principle nod to setting up the 8th Pay Commission and the ToR has been finalised after consultation with various ministries state governments and staff side of joint consultative machinery according to an official statement.