8th Pay Commission may roll out by 2026–27; Kotak sees minimum pay rising to Rs 30,000

The implementation of the 8th Central Pay Commission (CPC) may still be a couple of years away, with Kotak Institutional Equities projecting a rollout by late 2026 or early 2027. In its latest report, Kotak said that the Centre is yet to appoint members to the Commission and is still finalising its Terms of Reference (ToR). Based on past patterns, the 6th and 7th CPCs took about 1.5 years to submit their reports, followed by a 3–9 month wait for Cabinet approval and rollout.

A key projection by Kotak is a significant hike in the minimum salary level—from ₹18,000 to ₹30,000 per month—implying a fitment factor of 1.8 and a real pay increase of around 13%. This hike is expected to directly impact around 3.3 million central government employees, with Grade C staff (who make up nearly 90% of the workforce) likely to benefit the most.

The brokerage pegs the fiscal cost of implementing the 8th CPC at 0.6–0.8% of GDP, translating to an additional outlay of ₹2.4–3.2 lakh crore. Historically, CPC payouts have provided a short-term boost to consumption and savings, especially in sectors like automobiles and consumer staples. However, Kotak notes that this impact usually lasts for less than a year.

Citing RBI data, the report also recalled that the 7th CPC and the One Rank One Pension (OROP) scheme had together added about two percentage points to India’s GDP growth in FY17. In terms of savings, Kotak estimates that Rs 1–1.5 lakh crore could flow into physical and financial assets, including equities and bank deposits, from the expected pay hike cycle.

Meanwhile, the central government has officially acknowledged that it has received ToR suggestions from the Staff Side of the National Council of Joint Consultative Machinery (NC-JCM), a key employee representative body. The inputs have also been sought from major ministries like Defence, Home Affairs, and the Department of Personnel and Training.

The NC-JCM has submitted 15 major recommendations for the 8th Pay Commission. These include broad employee coverage, including Central Government, Defence, UT, and Grameen Dak Sewaks—along with a revised pay structure effective January 1, 2026. The Council has also urged that the minimum wage be based on modern living standards, with a revised Aykroyd formula and 3.6 consumption units per family.

Other major demands include merging overlapping pay levels, fixing anomalies in the Modified Assured Career Progression (MACP) scheme, merging DA/DR with basic pay, restoring the old pension scheme, and improving CGHS medical benefits. The Council also called for extending education allowances up to post-graduate level, restoring need-based advances, and providing risk allowances for railway and defence civilian staff.

Though the 8th CPC promises a substantial boost in employee incomes, Kotak emphasized that the government is likely to proceed cautiously, given the fiscal implications. For now, the timeline and scope are still evolving, but the roadmap suggests a major salary revision is on the horizon.

Keywords: 8th Pay Commission, CPC 8 rollout, Kotak report, minimum salary ₹30,000, central govt salary hike, fitment factor 1.8, MACP reform, NC-JCM ToR, DA DR merger, NPS rollback, old pension scheme demand, CGHS reform, India salary revision 2026