8th Pay Commission: How Inflation Could Reshape Salary and Pension Hikes in 2027–28

New Delhi: In the last weeks of 2025, expectations regarding the 8th Pay Commission have come a little closer to reality. The tenure of the 7th Pay Commission ends on December 31, 2025, while the new commission has been given 18 months to complete the work. In such a situation, it is clearly visible that it is difficult to implement the new pay structure before the end of 2027 or the beginning of 2028.

No official date has been announced by the government, but it is believed that this time, not only the salary structure but also the effect of inflation, increasing expenditure in cities, and especially the cost of living are also going to be the main basis.

Why is inflation playing a big role?

The expenditure structure of families has changed in the last few years. General inflation may appear to be under control, but everyday costs have increased significantly. In cities, rent, children's education, travel, electricity, water, and medical expenses have continuously gone up. This is the reason why this time it will not be enough to increase the salary only on the basis of figures.

According to a finance expert, the Commission needs to understand the changes that are impacting the pockets of the common family. Considering inflation as just a number does not reveal the complete picture, because the real challenge is to save purchasing power.

Where are you feeling the impact the most?

• Cost of living, i.e., housing, has become the biggest burden.
• Rent, home loan EMIs, maintenance charges, and electricity bills—pressure from all sides.
• That is why improvements in fitment factor and HRA are at the center of discussion. If the salary revision is not according to the actual expenditure, then both saving and spending plans will be affected.

Are reforms not the only answer to inflation?

Pay Commission also brings financial reforms. This means that salaries are not just about growth but also about long-term stability, better job attractiveness, and motivation to remain in government services. Experts believe that the wage revision will not serve its purpose if actual expenses are ignored.

Will arrears be received or not?

This is the biggest question. According to tax experts, even if the implementation is delayed, the arrears are likely to be counted from January 1, 2026. This means that the payment will come later, but the chances of getting the right are less.

What to see next?

• At present, employees and pensioners do not have much option other than patience. But the signs are clear:
• Changes in salary and pension will be directly linked to inflation.
• HRA structure can change based on the expenditure of cities
• It is almost certain that the fitment factor will go up.
• It will take time for the salary to be effective, but the expectation of arrears will remain.