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The winter session of Parliament is set to begin on December 1, and central government employees are eagerly awaiting clarity from the government on the confusion surrounding the 8th Pay Commission's ToR, which was announced earlier this month. In addition to the ToR, employees also want to know whether there will be any changes to DA (Dearness Allowance) and DR (Dearness Relief) in the January 2026 cycle. All this concern and confusion is arising because the 10-year cycle of the 7th Central Pay Commission ends on December 31, 2025, meaning the next DA/DR revision will be the first outside the current Pay Commission cycle. The 8th Pay Commission, whose work is underway, will submit its report on pay and pension revisions in 18 months from now.

Meanwhile, alleged inconsistencies in the 8th Pay Commission's ToR, the government's silence on the issue, and the starkly different trends observed in the work of previous Pay Commissions have created confusion among 12 million employees and pensioners. Let us explain the entire matter…

Employees are unhappy with the 8th Pay Commission ToR
Immediately after the government notified the 8th Pay Commission ToR, the employee wing of the National Council of Joint Consultative Mechanisms (NC-JCM), which represents central government employees in formal discussions with the government, and several employee unions objected to missing points in the document. They say that many of their key demands have been omitted, even though they had already submitted a limited list of demands. The biggest complaint is the absence of pension revision for existing pensioners and family pensioners in the ToR, causing widespread disappointment among pensioners.

Unions allege that there are several long-standing anomalies related to pay fixation, pensions, minimum wages, and the fitment formula. They want 50 percent DA/DR to be merged into the basic pay or pension, along with a 20 percent interim relief from January 1, 2026. They are also demanding the abolition of the NPS/UPS and the restoration of the old pension scheme, the release of DA/DR arrears for the 18-month pandemic period, and the removal of the 5% cap on compassionate appointments.

Further adding to employees' frustration, the government has yet to respond to ToR-related concerns. However, some MPs have raised these ToR issues with the government, so employees are hopeful that the central government will provide clarification when the Parliament session begins on December 1.

The root of the confusion: What will happen after December 31, 2025?
The 7th Pay Commission cycle ends on December 31, 2025. The 8th Pay Commission has been given 18 months to complete its report and submit it to the government. After the report is submitted, it will take at least six months for Cabinet approval and implementation of pay and pension revisions.

For previous commissions, implementation typically took 6-12 months after the report was submitted. Given past trends, this means that the final implementation of the 8th Pay Commission may only occur by the end of 2027 or early 2028.

Here are two key questions that have raised concerns among employees:

Will pay and pension revisions be implemented retroactively from January 1, 2026?

Will dearness allowance increases cease after December 2025, when the 7th Pay Commission cycle ends?

The answers to both questions are available. Will the 8th Pay Commission be implemented retroactively? History bears the answer. Employees fear that because the ToR does not specify an implementation date, the government may not implement the new pay structure from January 1, 2026. However, past trends offer strong assurances.

The 7th Pay Commission received Cabinet approval in June 2016. This resulted in the commission being implemented retroactively from January 1, 2016. Regarding the Sixth Pay Commission, Cabinet approval was received in August 2008. This commission was implemented retroactively from January 1, 2006. Despite delays, each commission maintained a 10-year revision cycle and provided employees with arrears from the due date. According to this logic, the Eighth Pay Commission—regardless of when it is finally implemented—should be effective from January 1, 2026.

Will dearness allowance not increase until the Eighth Pay Commission is implemented?
This is the biggest question among employees today. The next dearness allowance cycle will begin in January 2026. Since the dearness allowance for January-June is announced around March each year, the revision will coincide with the completion of the Seventh Pay Commission's term. But importantly, there is no policy or precedent for withholding dearness allowance due to the end of a Pay Commission cycle.

In the past, after each Pay Commission, the dearness allowance continued uninterrupted even after the term of the previous commission ended. The dearness allowance was increased twice a year until the recommendations of the next Pay Commission were implemented.

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