The Indian government approved the formation of the 8th Pay Commission in January 2025. The aim of this commission is to review and revise the salaries of nearly 50 lakh central government employees. The new pay structure is expected to be implemented from January 1, 2026. However, delays in the setup process may push the rollout further, possibly to 2028, as no chairman or members have yet been appointed.
This has raised several questions among employees, especially those working in government banks, about whether they too will benefit from the 8th Pay Commission. Let’s take a closer look.
The Pay Commission is designed for Central Government employees only. It revises the pay scales, allowances, and pensions of staff working across different central government departments. Once implemented, it will increase the salaries of employees and also benefit retired central government staff through higher pensions.
However, employees of government banks are not covered under the 8th Pay Commission. According to tax experts and financial reports, bank employees’ salaries are revised separately under agreements signed with the Indian Banks’ Association (IBA). This system is different from the Pay Commission framework, which is why employees of public sector banks will not see changes in their pay structure through the 8th Pay Commission.
This has left many bank employees disappointed, as they had hoped to receive similar benefits as other government staff. Their salaries will continue to be revised through IBA negotiations rather than through the recommendations of the Pay Commission.
Although the government has already approved the 8th Pay Commission, its work has not officially begun. The main reason is that the notification for the commission has not yet been issued. Without this notification, no chairman or members can be appointed to the panel.
On August 12, 2025, Minister of State for Finance Pankaj Chaudhary responded to a question in the Rajya Sabha about the progress of the commission. He explained that the notification is pending because the government is still collecting suggestions and inputs from various ministries and state governments regarding the Terms of Reference (ToR) for the commission.
Chaudhary stated that letters were sent on 17 January and 17 February 2025 to several major stakeholders, including the Ministry of Defence, Ministry of Home Affairs, Department of Personnel and Training, and all state governments. The inputs received from these bodies are necessary to finalise the commission’s framework. Until all responses are collected and reviewed, the notification cannot be issued.
Only after this step will the chairman and other members of the 8th Pay Commission be appointed. The government has assured employees that the notification will be issued at the “appropriate time”, but no fixed timeline has been announced yet.
The delay has caused frustration among lakhs of central government employees and pensioners who were eagerly waiting for a salary hike. Many had expected a smoother and quicker process after the approval earlier this year. Experts believe that if the commission does not start work soon, the actual implementation may go beyond 2026 and stretch to 2028 or later.
Employees argue that inflation and rising costs of living are already creating financial stress. They are hopeful that once the Pay Commission comes into effect, it will not only revise their salaries but also increase allowances and provide relief through higher pensions.
For now, employees of government banks remain outside the scope of these benefits. Their pay will continue to depend on periodic agreements through the IBA system, rather than the decisions of the Pay Commission.
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The Pay Commission is a significant exercise that has always had a wide impact on India’s economy, salaries, and pensions. While its approval is a major step, the delay in issuing a notification has slowed down progress. The government is working to finalise the Terms of Reference after consulting all stakeholders. Once this stage is complete, the commission will be formally constituted and will begin its work of revising pay structures.
Until then, central government employees will have to wait for clarity, and bank employees will need to rely on their existing salary revision mechanisms. The hope remains that once formed, the 8th Pay Commission will address the needs of employees fairly and provide much-needed financial relief in the coming years.
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