8th Pay Commission Update: With the dearness allowance hiked for the July-December period, will the Centre finally make a decision on setting up the next pay commission? This question is likely on the minds of crores of central government employees and pensioners, who believe there may be announcements soon, especially considering the trend in which the Centre has implemented new pay commissions approximately every 10 years. The new pay commission is expected to propose a revision in salaries and pensions of government employees taking into consideration various economic indicators, especially inflationary trends.
After a long wait, central government employees and pensioners have been granted a dearness allowance (DA) of 3%, as expected. With this increase, the DA now stands at 53% of the basic pay for employees. This hike is effective from July 1, 2024, meaning employees and pensioners will receive three months of arrears when they get their October salary, just before Diwali.
8th Pay Commission announcement likely early next year?
It is expected that the Centre might establish the 8th Pay Commission early next year probably in the Union Budget 2025. Once the commission is formed, it takes some time to finalize its recommendations before submitting its report to the Centre, says a Union leader, who feels Budget 2025 would be “appropriate time” to make an announcement. The last time, the 7th Pay Commission took more than 18 months to finalize its report, which was implemented from January 2016.
How will 7th Pay Commission impact salary and pension of central govt employees?
Like they saw in previous pay commissions, employees and pensioners are eager to see what changes this 8th Pay Commission brings to their emoluments. During the transition from the 6th Pay Commission to the 7th, employee unions advocated for a fitment factor of 3.68 for salary revisions. However, the government ultimately set the fitment factor at 2.57, which serves as a crucial multiplier for calculating salaries and pensions.
With this fitment factor, the minimum basic pay for central government employees increased to Rs 18,000 per month, up from Rs 7,000 — a 2.57-fold rise. Similarly, the minimum pension for retirees rose from Rs 3,500 to Rs 9,000. Additionally, the maximum salary for serving employees was revised to Rs 2,50,000, while the maximum pension was set at Rs 1,25,000, all based on the 2.57 fitment factor.
Also read: 7th Pay Commission Update: Central govt employees, pensioners get 3 pc DA hike for July-Dec 2024
What pensioners can expect from the next pay commission
There have been speculations that the government may revise the salaries and pensions of central government employees based on a fitment factor of 3.68. However, this was the demand during the 7th Pay Commission, which ultimately set the fitment factor at 2.57. According to some reports, the pay matrix for the 8th Pay Commission is likely to be prepared using a fitment factor of 1.92.
So, what will be the minimum salary and minimum pension for employees and pensioners based on a 1.92 fitment factor?
Currently, the minimum salary is Rs 18,000, which could be revised to approximately Rs 34,560. Similarly, the minimum pension may be set at around Rs 17,280.