8th pay commission
More than 33 lakh central government employees and more than 66 lakh pensioners, who are eagerly waiting for the implementation of the 8th Pay Commission, if they are expecting a significant increase in their salary and pension, then they may be somewhat disappointed. According to the fresh report of Kotak Institutional Equities, the fitment factor for the 8th Pay Commission may be as low as 1.8, resulting in an increase of about 13 percent in real salary.
An earlier report by Ambit Capital stated that the current 7th Pay Commission, which will end in December 2025, has resulted in an effective 14.3 per cent increment since 2016, which does not include allowances, which is still higher than the expected increase for the upcoming 8th Pay Commission. Why can’t there be a significant increase in the salary of central government employees and pensioners from the 8th Pay Commission, and when it is likely to be implemented. Let’s try to understand.
How does fitment factor affect salary and pension?
The report titled Kotak Institutional Equities has expected a fitment factor of about 1.8 in the report titled “8th Pay Commission: Lump sum … after some time”. The actual growth in salary or pension of central government employees depends entirely on this ‘fitment factor’ or multiple recommended by the Commission.
The fitment factor is used to calculate a new basic salary based on the current basic salary of an employee. For example, the Seventh Pay Commission had set a fitment factor of 2.57, causing the monthly minimum basic salary of central government employees to increase from Rs 7,000 to Rs 18,000.
However, it is important to understand that the fitment factor of 2.57 does not mean that the total salary will increase 2.57 times. This fitment factor applies only to basic salary, which increases it. They say that the employee unions, especially the National Council-JCM’s employee side, has formally opposed the proposed cuts and said that such a step will be uneven and morale-breaking, especially given the increasing inflation.
What happens in the salary of the central government employee?
A government employee has some major factor. Basic salary, which is the main component of salary and on which the fitment factor is applied. DA or dearness allowance is a biennial adjustment declared by the government that helps employees to reduce the influence of inflation on their total income. It is revised every year in January and July. After the January 2025 announcement, DA is currently 55 per cent of the original salary. Therefore, assuming that the basic salary of an employee is Rs 20,000 per month, his DA will be Rs 11,000. Housing rent allowance, one per cent of the basic salary is also prescribed for HRA (housing rent allowance), which covers rental expenses and transport allowances. This amount is a certain amount based on your Peskel and your city.
When is the possibility of the 8th Pay Commission coming into force?
This process started in January 2025 with the announcement of the 8th Central Pay Commission, but there has been no progress in the appointment of its chairman and defines its scope. Kotak’s report states that the general procedure is to constitute the Central Pay Commission (CPC), which will discuss with the officials of the Central and State Government, the representatives of the employee organizations and pensioners, experts etc. After consultation, the Central Pay Commission (CPC) will submit its reports and recommendations to the government. The government will take the approval of the cabinet to implement the recommendations. Despite the delay, the recommendations of the 8th Pay Commission will be effective from January 2026. Therefore, the more delay in implementing the recommendations, the more delay will be done to the central government employees and pensioners.