7th Pay Commission expires on December 31, 2025, and the new commission has 18 months to submit its report. Therefore, it is now almost certain that the new salaries and pensions will not be implemented before the end of 2027 or the beginning of 2028.
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8th Pay Commission: In the year 2025, the eyes of central government employees were mostly fixed on the 8th Pay Commission. The announcement of the commission, the finalization of the Terms of Reference (ToR), and the appointment of members raised hopes that salaries and pensions would increase in 2026. But by the end of the year, the picture became clear. The 7th Pay Commission is ending on December 31, 2025, and the new commission has been given 18 months to submit its report. In such a situation, it is now considered almost certain that the new salaries and pensions will not be implemented before the end of 2027 or the beginning of 2028. This means that 2025 was a year of waiting, not of major benefits.
These reliefs were received
However, this year wasn’t completely empty. The biggest relief came regarding pensions. Claims on social media about pension discontinuation, DR, or future cuts had created fear among employees and pensioners. The government repeatedly clarified that the current pension system is secure and that any changes will follow the established process. This provided peace of mind, especially to retiring employees and pensioners. Furthermore, significant changes were made to the NPS rules. The limit for withdrawing the entire NPS fund upon retirement has been increased from ₹5 lakh to ₹8 lakh. A new option was introduced for those with a corpus of ₹8 lakh to ₹12 lakh, making retirement planning a little easier.
Relief on the inflation front
Some relief was also provided on the inflation front. Although there was no new salary in 2025, dearness allowance (DA) continued to provide support. A 2% increase in March and a 3% increase in October resulted in a total 5% increase in DA for the year. For many employees, this was the only regular increment they received, mitigating some of the impact of rising inflation. This increase in food, rent, and other daily expenses did provide some relief.
It was a year of reforms.
In addition, 2025 also saw an emphasis on digitization and simplifying service rules. Many tasks related to pensions, leave, transfers, and complaints were conducted online, reducing file turnover. The government also clarified which allowances and service conditions would be reviewed in the future, and which would remain unchanged. Overall, 2025 was not a year of significant gains, but it was certainly a year of stability, clear rules, and gradual reforms. Now, in 2026, employees are focused more on how robust and equitable the 8th Pay Commission’s recommendations are than on the date.
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