Overview

• The 8th Pay Commission remains unformed six months after Cabinet approval in January 2025, delaying Terms of Reference and member appointments
• Ambit Capital projects an effective salary and pension increase of 30–34% for central government employees and retirees once the new commission reports
• The additional burden on the Centre’s exchequer is estimated at Rs 1.8 lakh crore, up from the Rs 1.02 lakh crore added after the 7th Pay Commission
• The fitment factor under discussion could range from 1.83 to 2.46 while the current 55% Dearness Allowance will reset to zero at rollout
• Revised pay and pensions are expected to boost consumption and add 30–50 basis points to GDP growth, with pension fund inflows into equities potentially doubling