8th Pay Commission: What Salary Hike Central Employees Can Expect

The Union Cabinet, led by Prime Minister Narendra Modi, approved the formation of the 8th Pay Commission on January 16, 2025. The decision, announced just days before the Delhi Assembly elections, is set to bring significant salary hikes for public sector workers.

On X (formerly Twitter), Prime Minister Modi expressed his support for government employees, stating:

"We are all proud of the efforts of all Government employees, who work to build a Viksit Bharat. The Cabinet's decision on the 8th Pay Commission will improve quality of life and give a boost to consumption."

The announcement follows a recent development where the dearness allowance (DA) for central government employees exceeded 50% of their basic salary. Since July 1, 2024, central government employees and pensioners have been receiving 53% of their basic pay as DA/relief, with another revision expected in January 2025.

What Central Government Employees Can Expect

The current salary structure is based on recommendations from the 7th Pay Commission, implemented on January 1, 2016. With the establishment of the 8th Pay Commission, significant changes in the structure are anticipated.

Although the exact percentage of the salary hike has not yet been disclosed, initial reports indicate that the fitment factor—the multiplier used to calculate salaries and pensions—could increase from 2.57 to 2.86. If this adjustment is approved, the minimum basic salary of government employees may rise substantially, from Rs 18,000 to Rs 51,480.

Understanding the Fitment Factor

The fitment factor is a crucial component in determining revised salaries and pensions for central government employees. It acts as a multiplier, aligning the pay scale with the recommendations of the new pay commission.

Under the 7th Pay Commission, the fitment factor of 2.57 raised the minimum basic salary from Rs 7,000 (under the 6th Pay Commission) to Rs 18,000. This basic salary excludes allowances such as dearness allowance (DA), house rent allowance (HRA), and transport allowance (TA). When these additional benefits are included, the total minimum salary increased to Rs 36,020 per month.

The 8th Pay Commission is expected to introduce revisions to various allowances, potentially leading to a significant boost in overall remuneration for central government employees.

Impact on Employees

The proposed changes are expected to improve the quality of life for central government employees and stimulate domestic consumption. As the term of the 7th Pay Commission ends in 2026, employees and pensioners are optimistic about the forthcoming revisions.