8th Pay Commission May Offer: Central government employees are projected to receive a modest 13% effective salary increase under the forthcoming 8th Pay Commission, which is slightly below the 14.3% hike provided during the 7th Pay Commission, according to a report from Kotak Institutional Equities. The fitment factor, crucial for determining basic pay, is expected to be set at 1.8 for the 8th Pay Commission, as indicated by the report. This represents a notable decline from the 2.57 utilized in the previous commission.
Although a fitment factor of 1.8 implies an increase in basic pay — potentially growing from Rs 18,000 to approximately Rs 32,000 — the overall effective salary growth is likely to be limited. This is due to the reset of the dearness allowance (DA), which is currently at 55%, being adjusted to zero with the introduction of the new pay structure.
Impact on Salary Structures
The updated compensation may reach almost Rs 90,000 for workers with a base income of Rs 50,000. However, disregarding additional allowances, the actual pay rise will only be Rs 12,500, going from Rs 77,500 to Rs 90,000 after accounting for the current DA of Rs 27,500.
According to experts, the introduction of the new DA structure would have a significant impact on the actual raise, even though the nominal increase in basic pay seems significant.
Employee Unions Demand Higher Fitment Factor
The suggested fitting factor has drawn criticism from employee unions. A fitment factor equal to or greater than the 7th Pay Commission’s has been demanded by representatives of the National Council-Joint Consultative Machinery (JCM), which represents central government workers and pensioners. Despite these requests, preliminary data indicates that the administration could choose a lower number.
The 8th Pay Commission is anticipated to be formally established in the upcoming months, and its recommendations are anticipated to be put into effect in 2026. Amid growing living expenses, central government employees are waiting for more information on their pay changes as the talks progress.
For example: With a fitment factor of 2.57, a salary of ₹18,000 becomes ₹46,260. With a reduced factor of 1.8, the same salary would only rise to ₹32,400.