Ahead of the festive season, the Modi government reduced GST rates, calling it a ‘Diwali gift’ for citizens. Now, government employees are anticipating another major announcement – the formation of the 8th Pay Commission board before the schedule for the Bihar Assembly elections is declared.
The appointment of the commission’s chairman and members would pave the way for its functioning. Experts believe this could be the government’s next big political move after the GST reforms, reported Patrika.
Although the 8th Pay Commission was announced in January 2025, the Terms of Reference (ToR) have not yet been finalised, nor have members been appointed.
A report by Kotak Institutional Equities suggests that drafting and implementing the recommendations typically takes 18–24 months. For instance, the 7th Pay Commission took 27 months from notification to implementation. This means the impact of the 8th Pay Commission is unlikely to be visible before late 2026 or early 2027.
RK Verma, General Secretary of the Joint Employees Council, noted that the central government could send a strong signal to employees and pensioners simply by announcing the board or issuing an official notification, even before the full process begins.
Heavy Financial Burden on Government
Financial experts warn that the real challenge lies in managing the fiscal load. Implementing the 8th Pay Commission is estimated to cost the government an additional Rs 2.4 to 3.2 lakh crore, nearly 0.6 to 0.8 per cent of GDP. Such a burden could strain fiscal balance, though higher consumption and a temporary boost in the market are expected, which may benefit the government politically.
Early Consultations Underway
The finance ministry has already initiated preliminary discussions with key departments, including Defence, Home, and Personnel. Minister of State Pankaj Chaudhary confirmed this in Parliament. The crucial question now is whether the Centre will fast-track the commission’s formation as part of its election strategy in Bihar or continue with the traditional timeline.
