As the 7th Pay Commission, which was implemented in 2016, is nearing the end of its decade-long tenure in January 2026, the hottest debate right now is about the next pay commission. The wait for the 8th Pay Commission has Central government employees eagerly watching for updates.

The 7th Pay Commission was established in February 2014 during the Manmohan Singh government. Its recommendations brought significant revisions to salaries and pensions. However, with its term ending inJanuary 2026, attention has shifted to the next panel. In the past, a new pay commission used to be set up every 10 years to review and adjust government employees’ basic salaries. Let’s understand what all considerations will be taken into account.

Fitment Factor Crucial for Salary Hikes

A key aspect of every pay commission is the fitment factor, which determines the extent of salary and pension increases. Under the 7th Pay Commission, the fitment factor was set at 2.57, raising the minimum salary from Rs 7,000 to Rs 18,000.

Employee unions, however, had demanded a higher fitment factor of 3.67, but it wasn’t approved. For the 8th Pay Commission, unions expect at least a 2.86 fitment factor. Shiv Gopal Mishra, Secretary (staff side) of the National Council of Joint Consultative Machinery (JCM), recently emphasised this demand.

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If the 2.86 fitment factor is adopted, salaries and pensions could see substantial hikes. The minimum salary of government employees could rise to Rs 51,480, compared to the current Rs 18,000. Similarly, pensions might increase to Rs 25,740, a significant jump from Rs 9,000.

Adhil Shetty, CEO of Bankbazaar.com, says, “The government implements Pay Commissions to help adjust salaries to counter the effects of inflation by revising pay structures. They analyse economic indicators like inflation rates, cost of living, and other trends to recommend salary increases. The fitment factor, a key tool, ensures uniform hikes across pay grades. This systematic adjustment maintains the purchasing power of Central government employees, allowing them to meet growing expenses.”

Formation of the 8th Pay Commission

The National Council of Joint Consultative Machinery (NC-JCM), the highest body representing employee grievances, has been actively pushing for action. In July 2024, it submitted a memorandum, requesting immediate steps to establish the commission. Another appeal was made in August 2024.

Employee unions also raised the issue with Finance Secretary earlier this month. They stressed the need for timely implementation to ensure smooth salary and pension adjustments.

Missed Announcement During Union Budget

Speculation about the formation of the 8th Pay Commission peaked before the Union Budget 2024-25, presented in July 2024. Media reports suggested that the Centre might announce the panel during the budget session. However, no such announcement was made, leaving employees waiting for clarity.

Looking Ahead

With the 7th Pay Commission’s term ending in 2026, the pressure to establish the next commission is growing. The fitment factor and its impact on salaries and pensions remain at the forefront of discussions.

For now, Central government employees can only hope that the Centre will prioritise their demands and initiate the process soon. The next few months could be crucial in shaping the future of government salaries and pensions in India.