The 8th Pay Commission’s recommendations are still 15–18 months away, keeping revised pay timelines and arrears impact at the centre of discussion.
8th Pay Commission Delay Pushes Revised Pay and Arrears Debate Into Spotlight
An official note issued last year stated that pay commission recommendations are generally implemented once every ten years. It added, “Usually, the recommendations of the pay commissions are implemented after a gap of every ten years. Going by this trend, the effect of the 8th Central Pay Commission recommendations would normally be expected from 01.01.2026.”
Millions of central government employees are hoping for a salary increase once the 8th Pay Commission comes into force from January 1, 2026. However, the wait may be longer than expected. According to a study released by ICRA as part of its Budget 2026–27 analysis, the commission’s recommendations are still 15 to 18 months away from being submitted to the government.
The Narendra Modi-led government announced the formation of the 8th Pay Commission on January 16, 2025. Later, on October 28, the Union Cabinet approved its Terms of Reference (ToR). The commission has been tasked with reviewing pay scales, allowances, and pension benefits for central government employees and pensioners.
The 7th Pay Commission’s tenure ended on December 31, and the 8th Pay Commission is scheduled to take effect from January 1, 2026. However, despite being officially set up, the commission’s work is still ongoing.
Based on previous pay commission cycles, once the report is submitted, the government usually takes another three to six months to study, approve, and formally notify the recommendations. Because the report is not yet ready, experts believe that actual implementation may only happen in late 2027 or even early 2028. This suggests that an immediate revision in salaries is unlikely.
ICRA expects the government’s salary bill to rise sharply in FY2028. This increase would come from the retrospective implementation of the 8th Pay Commission, which is likely to be effective from January 1, 2026. As a result, salary arrears would accumulate for nearly 15 months, adding to the government’s committed expenditure in both FY2028 and FY2029.
The ICRA report warns that delayed implementation could lead to a heavy financial burden. According to the agency, the build-up of arrears could push salary-related spending up by 40 to 50 percent in the FY2028 Budget. Such a sharp rise would reduce the government’s flexibility to spend on discretionary items, including capital expenditure, during that year.
The report also highlighted past experiences. When the 7th Pay Commission was implemented in FY2017, arrears were limited to just six months. Even then, the government’s salary expenditure rose by 20.4 percent. In contrast, the 6th Pay Commission faced a much longer delay. Its recommendations, effective from January 1, 2006, were implemented after more than two-and-a-half years. This resulted in massive arrears and put severe strain on the budget for two consecutive years.
ICRA believes the government may increase capital expenditure in FY2027. This would happen before higher committed spending begins from FY2028 due to the 8th Pay Commission. The agency estimates that the capital expenditure target for FY2027 could reach Rs. 13.1 trillion. This would be a 14 percent increase over the expected spending in FY2026.
The Pay Commission is still in the process of finalising its recommendations. A final decision on revised pay will only be taken after the Union Cabinet gives its approval. During the 7th Pay Commission, revised salaries and pensions were introduced from July 2016, but employees received six months of arrears starting from January 2016.
Going by this precedent, the 8th Pay Commission’s recommendations are also expected to be implemented retrospectively from January 1, 2026. If the commission submits its report by the end of 2027 and implementation begins in 2028, employees are likely to receive arrears calculated from the January 2026 effective date.
