8th Pay Commission: Central government employees and pensioners are closely tracking updates related to the 8th Pay Commission, as the tenure of the 7th Pay Commission is set to end on December 31, 2025. Once constituted, the new pay panel will examine salaries, allowances, and pensions before submitting its recommendations to the Centre.
February 2026 is emerging as a crucial month, especially for over 1.1 crore beneficiaries, as discussions around salary revisions and Dearness Allowance (DA) changes are expected to gain momentum during this period.
8th Pay Commission: What Latest AICPI Data Signals for Dearness Allowance (DA)
As per data released by the Labour Bureau under the Ministry of Labour and Employment, the All-India Consumer Price Index for Industrial Workers (AICPI-IW) remained unchanged at 148.2 in December 2025.
This comes after incremental rises of 0.5 points in November and 0.4 points in October. The AICPI-IW plays a critical role in calculating DA revisions for government employees.
Currently, DA stands at 58%, but estimates indicate a 2% increase from January 2026, taking it to 60%. There is growing speculation that the Centre may announce the DA hike before Holi on March 4, 2026, possibly in early March.
If approved, employees could also receive arrears for January and February 2026 as a lump-sum payment.
8th Pay Commission Questionnaire: Deadline and Process
Earlier this month, the government launched the official website of the 8th Pay Commission and invited suggestions from ministries, departments, employees, and other stakeholders.
An 18-question structured questionnaire has been made available to collect feedback on pay structure, allowances, and related concerns. This survey is hosted exclusively on the MyGov.in platform.
The last date to submit responses is March 16, 2026. The commission has clearly stated that only inputs submitted through MyGov will be considered. Responses sent via email, physical copies, PDFs, or other formats will not be accepted.
Will the 8th Pay Commission Lead to a 30% Salary Increase?
Reports suggest that January 1, 2026 may be treated as the effective date of the 8th Pay Commission. However, actual implementation could take more than a year. If that happens, employees may receive arrears for the interim period.
Salary hike expectations depend heavily on the fitment factor. With a fitment factor of 2.57, the minimum basic pay could rise from ₹18,000 to ₹46,260, translating to a 30–34% increase across most pay levels.
For employees in Level 1 to Level 5, even a fitment factor of 2.0 or above could result in arrears worth several lakhs, depending on rank and service duration.
Impact of 8th Pay Commission on Investors and Markets
From an investment perspective, the 8th Pay Commission is significant because higher salaries and DA for over 1.1 crore employees and pensioners could boost consumer spending.
Sectors likely to benefit include retail, FMCG, automobiles, housing, and banking, as increased income and arrears would improve liquidity in the economy in the short term.
However, analysts are also watching the fiscal impact closely. Higher government expenditure could affect long-term budget planning and borrowing levels, which may influence market dynamics over time.
