Eighth Pay Commission Updates: Recently, after the formal notification of Term of Reference (TOR) was issued, the 8th Pay Commission under the chairmanship of Justice Ranjana Desai has started its work. The Commission’s recommendations will have a direct impact on more than 50 lakh central employees and 65 lakh pensioners.

How much can be the fitment factor?

At present, everyone’s eyes are on the fitment factor, because the increase in salary and pension is calculated on this basis. However, its final decision will be taken only after the approval of the Union Cabinet. The commission has to submit its report within 18 months, which will include suggestions ranging from fitment factor to basic pay structure.

Many important aspects like inflation, cost of living and financial condition of the country are considered in determining the fitment factor. This factor was kept at 2.57 in the 7th Pay Commission, and it is believed that it may remain around this in the 8th Pay Commission also.

How much can the salary increase?

Ambit Capital’s report in July estimated that this time the fitment factor could be between 1.83 to 2.46. For example, if the basic pay of an employee is Rs 18,000, then if the fitment factor is 1.83, his salary will increase to Rs 39,940, whereas at the factor of 2.46, it can increase to Rs 44,280. This indicates that a significant increase in the salary of employees is possible in the next pay commission.

It is noteworthy that the formation of the Eighth Pay Commission was announced at the beginning of this year. But this committee was formally announced with a delay of about ten months. In such a situation, when 18 years time has been given to the Pay Commission to send recommendations, it is difficult to implement it from the beginning of next year. It is more likely that it will be implemented from 2027 and along with the arrears, the money will be given to the employees by adding it to their salary or pension.

Also read: From Dhaba to Resort, from real estate to hospitality… Know how big Dharmendra’s business is.

8th pay commission salary hike: The Modi government at the Center announced the formation of the 8th Pay Commission in January 2024. Since then, about 1.2 crore central government employees and pensioners across the country are eagerly discussing its outline and possible salary increase. The biggest question is how much fitment factor will be and how much salary will increase?

What is a fitment factor?

The Fitment Factor is the Multiplier through which the new Pay Commission is calculated the new basic pay. For example, if an employee has an existing basic salary 18,000 and the fitment factor is 2.86, then his new basic pay can be 51,480. But as big as this figure is seen, there is no real benefit.

Understand from previous pay commissions

The Fitment Factor in the 6th Pay Commission (2006) was 1.86, which increased the salary of 54 per cent on an average. In comparison, the fitment factor in the 7th Pay Commission (2016) increased to 2.57, but the real increase was only 14.2 percent. The main reason for this was that most of the fitments were used only in adjusting dearness allowances (DA).

What can happen this time?

Different employee organizations demand that fitment factor 2.86 be placed in the 8th Pay Commission so that the “real increase in salary and pension” feels. However, according to a report by Financial Express, former Finance Secretary Subhash Garg says that such a huge increase does not seem practically possible. It is estimated that the fitment factor may be fixed around 1.92. If this happens, the minimum basic pay can go up to 34,560. But experts believe that a large part of the fitment factor will again go into inflation adjustment.

How did the real increase in the 7th Pay Commission?

During the 7th Pay Commission, 125 percent dearness allowance was added with the current salary. In that case, only 0.32 of the fitment factor of 2.57 could be considered as “new increase”. Meaning, only 14.2 percent of the total increase was the real advantage, everything else was just the new form of the earlier amount.

What is the Current Status?

The government has recently issued two circulars and started the appointment process for 40 posts for the 8th Pay Commission. Officers are being appointed on deputation from different departments on these posts. Soon the Terms of Reference (Tor) of the Commission will be released, after which the chairman and other members will be appointed. The recommendations of the 8th Pay Commission are to be implemented from 1 January 2026 as the tenure of the 7th Commission is ending on 31 December 2025.

How much financial burden will be on the government?

The 7th Pay Commission had an additional financial burden of 1.02 lakh crore on the government. If the fitment factor is kept more in the 8th Commission, then this burden may increase even more. Therefore, this time the government is taking more thoughts.

Also read: Trump is preparing to reduce the price of drugs in America, what will be the effect on India’s generic medicines?

8th pay commission salary hike: Ever since the announcement has been made about the 8th Pay Commission, government employees are worried about how much their salary will increase when the commission is implemented. But, now their wait seems to be over. In fact, Goldman Sachs has made an estimate about this, which shows how much the salary of government employees will increase after the implementation of the 8th Pay Commission.

What does Goldman Sachs report say

According to the report of Goldman Sachs, after the implementation of 8th Pay Commission, the salary of government employees can increase by 14,000 to 19,000. Along with this, Goldman Sachs has estimated that this increase may be applicable in 2026 or 2027.

Understand this in easy language

Currently, the average salary of central government employees is Rs 1 lakh per month (before tax). After the 8th Pay Commission, it can increase by 14 to 19 percent. Three possible plans have been made for this. If the government holds a budget of 1.75 lakh crore (for 50 percent salary and 50 percent pension increase), then the average salary will increase by Rs 14,600 per month. At the same time, if a budget of 2 lakh crore is kept, then the salary will increase by Rs 16,700 per month. Whereas, if 2.25 lakh crore are allocated, then employees will get an increase of 18,800 per month in salary.

50 lakh employees and 65 lakh pensioners will benefit

More than 50 lakh government employees and 65 lakh pensioners will directly benefit from 8th Pay Commission. Earlier, under the 7th Pay Commission, the government spent 1.02 lakh crore.

When will the 8th Pay Commission apply?

On 16 January 2025, the Union Cabinet approved the 8th Pay Commission. However, the names of the chairman and members of the Commission have not been decided yet. The Commission report may apply in 2026 or 2027.

Fitment factor has a tremendous boom in salary

The fitment factor is fixed under the Pay Commission, which increases the salary. It was 2.57 in the 7th Pay Commission and now it is being demanded that it be increased further. If the fitment factor remains 2.57, the minimum salary will increase from 18,000 to 46,260. Whereas, the minimum pension will increase from 9,000 to 23,130. If the fitment factor 1.92 is fixed, as is estimated by former Finance Secretary Subash Garg, the minimum salary will be 34,560. Although the demand of employees was from 2.86 fitment factor, it can be challenging for the government to implement it.

Also read: Kunal Kamra tightened up on Bhavish Aggarwal, founder of Ola Electric during the show, said this big thing

Ever since the announcement of the 8th Pay Commission, the discussion has intensified on the ‘Fitment Factor’ on the basis of the amendment in the salary and pension of the central government employees and pensioners.

According to reports, the fitment factor in the 8th Pay Commission can be between 1.92 and 2.86. Actually, the fitment factor is a multiplier, which the government uses to revise the salaries and pension of the employees. However, there is also a misconception about the fitment factor.

What is the real meaning of fitment factor?

It is a misconception that if the fitment factor in the 8th Pay Commission is 2.86, then the salary and pension will increase equally. Actually, the fitment factor applies only to the basic salary, not to gross salary.

Why does salary and pension increase not in proportion to fitment factor?

According to the report of Financial Express, the fitment factor does not show much effect on the gross salary, as many other components are also included in the total salary. While revising salary and pension, the pay panel takes into account many other aspects, such as merging DA with basic pay and adding or removing many allowances. This ensures that the calculation of the fitment factor will be applicable only to the basic pay.

Understand it in easy language that the fitment factor in the 7th Pay Commission was 2.57, which increased from Rs 7,000 to Rs 18,000. But, when it comes to the real increase, the salary and pension of the level 1-3 employees increased by an average of 15 percent. However, the employees of Level 4-10 got more increase.

At the same time, the fitment factor in the 6th Pay Commission was 1.86, but the salary and pension increased by 54 percent. It is clear that having high fitment factor does not mean that the total salary will increase equally.

Actual increment in previous pay commissions (percent)

Second Pay Commission: 14.2 percent

Third Pay Commission: 20.6 percent

Fourth Pay Commission: 27.6 percent

Fifth Pay Commission: 31.0 percent

Sixth Pay Commission: 54.0 percent

Seventh Pay Commission: 14.3 percent

When will the 8th Pay Commission be set up?

Now that the date of formation of the 8th Pay Commission is approaching, government employees and pensioners are expecting a good increment this time, so that they can live a “respectable and dignified life”. Let us tell you, the 8th Pay Commission is expected to be formally formed in April 2025.

Earlier, the employee side of the National Council of Joint Consultative Mechanism (NC-JCM) suggested that the terms and conditions of the new pay commission should also include review of retirement benefits like salary, allowances, other benefits, pension and gratuity in the terms and conditions of the new pay commission. Now it remains to be seen how much the 8th Pay Commission meets the expectations of government employees.

ALSO READ: Will Donald Trump’s reciperook tariff be expensive, the decision will be applicable from April 2