Average real pay increase 27% in pay commissions since 1957; pensioners benefit more than serving staff

The average pay increase, after adjusting for inflation, for the six Central Pay Commissions since 1957 has been around 27 percent, with pensioners consistently gaining more than serving employees, a Moneycontrol analysis shows.

The government has announced the terms of reference for the Eighth Central Pay Commission, with an 18-month mandate. The commission’s recommendations will take effect in 2026, covering the next 10-year pay cycle for central government employees.

Fiscal cost rising exponentially

The financial cost of pay revisions has increased dramatically over time — from Rs 39.6 crore under the Second Pay Commission (1957–59) to nearly Rs 1 lakh crore under the Seventh Commission (2014–15). The expansion reflects both a larger workforce and more generous compensation formula