8th Pay Commission news: Central government employees may receive a modest effective salary hike of 13% under the upcoming 8th Pay Commission, lower than the 14.3% raise offered during the implementation of the 7th Pay Commission, according to a recent report by Kotak Institutional Equities.
The fitment factor, a key multiplier used to revise basic pay, is expected to be pegged at 1.8 this time, a significant drop from the 2.57 used during the 7th Pay Commission. While a 1.8 fitment factor means the current basic pay would be multiplied by 1.8 (a 80% hike in basic pay), the effective hike in total salary is estimated to be just 13% because the dearness allowance (DA), currently at 55%, will be reset to zero once the new pay structure is implemented.
Basic Pay Could See a Nominal Increase, But DA Reset Will Offset Gains
Currently, the minimum basic salary for central government employees is Rs 18,000, which—under a 1.8 fitment factor—could rise to around Rs 32,000. However, when considering the existing DA component of Rs 9,900 (55% of Rs 18,000), the effective salary growth in real terms will be minimal.
Similarly, for employees earning a basic salary of Rs 50,000, the revised pay under the proposed fitment factor may touch Rs 90,000. But with the current DA component of Rs 27,500 (55% of Rs 50,000), the effective increase will again be limited, rising only from Rs 77,500 to Rs 90,000, excluding other allowances.
Experts note that while a jump in basic pay appears substantial on paper, the real hike will depend heavily on how the new DA structure is phased in after the reset.
Employee Unions Seek Parity with 7th Pay Commission Fitment Factor
Employee unions have expressed dissatisfaction with the proposed fitment factor. Members of the staff side of the National Council-Joint Consultative Machinery (JCM), an official forum representing central government employees and pensioners, have stated that their minimum demand would be a fitment factor at least equal to the one used during the 7th Pay Commission.
However, early indicators suggest that the government may settle for a lower figure. The 8th Pay Commission is expected to be formally constituted in the coming months, with its recommendations likely to be implemented around 2026.