8th Pay Commission: Central government employees and pensioners have high expectations from the 8th Pay Commission. How much will be the actual increase in salary, this is a question that is roaming in everyone’s mind. Although the commission has been formed and work has started on it, how much impact it will have on the pockets of the employees will depend on many factors. Let us discuss this topic in detail.
8th Pay Commission: Formation and Process
According to the latest information, the central government had announced the formation of the 8th Pay Commission in January 2025. The process of forming the panel of the commission is also underway and it is expected that its members will be selected soon. Usually, it takes about 15 to 18 months for the commission to submit its recommendations to the government . After this, the government considers these recommendations and decides to implement them.
It is believed that the recommendations of the 8th Pay Commission can be implemented from January 1, 2026 , as the term of the 7th Pay Commission is ending on December 31, 2025.
Factors affecting real wage growth
The actual pay rise of employees will depend on a number of things, the most important of which are:
- Fitment Factor: This is a coefficient that is used to convert the existing basic pay into the new pay scale. In the 7th Pay Commission, this factor was 2.57. There is still speculation on how much it will be in the 8th Pay Commission. Employee organizations are demanding to increase it to 2.86 .
- Adjustment of Dearness Allowance (DA): When a new pay commission is implemented, often the existing dearness allowance is merged with the basic pay. Currently, central employees are getting 55% dearness allowance. If this is merged with the basic pay, it will be a significant increase in salary.
- Method of DA calculation: There are also discussions that the government may change the method of calculation of dearness allowance in the 8th Pay Commission, in which the base year can be changed.
- Other Allowances and Benefits: The Pay Commission also makes recommendations on various allowances and benefits like House Rent Allowance (HRA), Transport Allowance (TA) etc. which have an impact on the total income of the employees.
Potential salary increase: different scenarios
Here are some estimates of the possible salary hikes based on the fitment factor:
- If the fitment factor is 1.92: Some experts believe that the government will not increase the fitment factor too much considering the financial burden and it may remain around 1.92. In this case, if the current basic salary is ₹30,000, the new basic salary may be ₹57,600 (30,000 x 1.92).
- If the fitment factor remains 2.57 (same as 7th Pay Commission): In this case, the basic pay of ₹30,000 will increase to ₹77,100 (30,000 x 2.57).
- If the fitment factor is 2.86 (demand of employees’ organisations): If the government accepts the employees’ demand, the basic pay of ₹30,000 may increase to ₹85,800 (30,000 x 2.86).
- Effect of Dearness Allowance: If 55% of dearness allowance is merged with the existing basic salary, the basic salary of ₹30,000 will become ₹46,500. After this, the fitment factor will be applied on it, which will further increase the final salary.
Some reports are also estimating that the basic salary of employees may increase by 30% to 40% under the 8th Pay Commission.
What about pensioners?
The 8th Pay Commission will recommend revision of pension not only for serving employees but also for pensioners. The pension of pensioners is also expected to increase in the same proportion as the salary of employees increases. Dearness Relief (DR) is also given to pensioners like dearness allowance and it will also increase.
conclusion
Central employees and pensioners are expected to get a good increase in salary and pension from the 8th Pay Commission. However, how much the actual increase will be will depend on the recommendations of the commission and the final decision of the government. The fitment factor and adjustment of dearness allowance will be the two most important factors that will have the biggest impact on the pockets of the employees. All eyes are on the report of the commission and the next steps of the government. It is expected that this commission will definitely give some relief to the employees and pensioners in this era of inflation.