Cabinet's decision on 8th Pay Commission will improve quality of life, give boost to consumption: PM Modi

"We are all proud of the efforts of all Government employees, who work to build a Viksit Bharat. The Cabinet's decision on the 8th Pay Commission will improve quality of life and give a boost to consumption," PM Modi said in a post on X.

The Union Cabinet has given its approval for the 8th Pay Commission to revise the salaries and pensions of central government employees and retirees.

Announcing the decision on Thursday, 16 January, Union Minister Ashwini Vaishnaw confirmed the approval but did not specify when the commission would be constituted.

This decision, coming just ahead of the Union Budget 2025, is expected to lead to a salary hike for government employees and pensioners.

The 8th Pay Commission is anticipated to build upon the reforms of the 7th Pay Commission, which came into effect in January 2016.

The new commission is expected to finalise its recommendations by the end of 2025, and a committee has been formed by the Central government to monitor its implementation.

According to reports, a significant change being considered is an increase in the fitment factor from 2.57 to 2.86.

This key parameter, which determines the multiplication factor for calculating revised salaries and pensions, could result in higher basic salaries for employees if implemented.