The much-anticipated 8th Pay Commission is expected to bring significant salary and pension increases for central government employees. With the commission's formation now approved, employees and pensioners are eager to understand how these changes will impact their earnings.

Approval of the 8th Pay Commission

The 8th Pay Commission has been officially approved by Prime Minister Narendra Modi’s government to revise the pay structure for approximately 50 lakh central employees and 65 lakh pensioners. The announcement was made by Union Minister Ashwini Vaishnaw in January 2025, ahead of the Union Budget 2025-26. However, details regarding its implementation timeline were not disclosed.

The new pay structure is expected to take effect in 2026, aligning with the expiration of the 7th Pay Commission. This timeline provides the government with sufficient opportunity to review and finalize recommendations before rolling out the revised pay scales.

Expected Salary Hike: What Employees Can Anticipate

Fitment Factor to Determine Pay Increase

The salary hike under the Pay Commission is determined by the fitment factor—a multiplier used to adjust basic pay. A higher fitment factor results in a greater salary increase, while a lower one results in a smaller hike. Various economic aspects, including inflation, employee needs, and government financial capacity, influence this calculation.

Estimated Salary Increase of 40-50%

Experts predict that the fitment factor under the 8th Pay Commission may range between 2.28 and 2.86, leading to a 40-50% increase in basic salary. Most estimates suggest a fitment factor between 2.6 and 2.85, which would directly impact the basic salary and pension of central government employees.

Historical Trends in Pay Commissions

Looking at previous pay commissions:

• The 7th Pay Commission applied a 2.57 fitment factor, resulting in an average salary increase of 23.55%.
• The 6th Pay Commission had set a 1.86 fitment factor, leading to a lower salary jump.

With each successive commission increasing the fitment factor, experts believe the 8th Pay Commission could bring an even larger salary boost than its predecessors.

Projected Salary and Pension Hike Calculation

If the fitment factor is set between 2.6 and 2.85, the expected salary and pension increases would be:

• A basic salary of ₹20,000 could rise to ₹46,600 – ₹57,200.
• The minimum basic salary under the 8th Pay Commission is estimated to exceed ₹40,000.
• Pension amounts will also see a proportional rise based on the revised salary structure.

Next Steps: Formation of the Review Committee

A review committee will be established to assess the pay structure changes and finalize recommendations. This committee will submit its findings to the central government before the official implementation of the 8th Pay Commission. Reports suggest that committee members may be appointed by the end of March 2025.

With higher salaries and pensions on the horizon, government employees are closely watching developments as they prepare for one of the biggest pay revisions in recent years.