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The central government has given a big gift to the government employees even before the 2025 budget. The Narendra Modi-led government has approved the formation of the 8th Pay Commission.
The 7th Pay Commission was implemented in 2016 during the tenure of the Narendra Modi government. Then, there was a significant increase in the minimum basic salary of central employees. Now, the 8th Pay Commission has been approved. This can once again lead to a strong jump in the basic salary of the employees.
After the cabinet meeting on Thursday, Union Minister Ashwini Vaishnav said that under the chairmanship of Prime Minister Narendra Modi, a decision has been taken to implement the 8th Pay Commission, giving great relief to the central employees.
The formation of the 8th Pay Commission will benefit 48.67 lakh central government employees and 67.95 lakh pensioners. This commission can be implemented in 2026, as the tenure of the 7th Pay Commission is till 31 December 2025.
In such a situation, how much the salary and pension of the employees can increase after the implementation of the 8th Pay Commission?
Salary increased by this much when 7th pay commission was implemented
In the year 2016, during the tenure of the Modi government, the 7th Pay Commission was constituted, then the basic salary became Rs 18000. At the same time, before that the minimum salary of the employees was Rs 7000, which was under the 6th Pay Commission.
There was a significant jump in the salary of government employees after the 6th Pay Commission to 7th Pay Commission.
Under the 7th Pay Commission, a fitment factor of 2.57 was implemented, due to which the basic salary of central government employees and pensioners was multiplied by 2.57.
This was equivalent to a 2.57% increase in their basic salary. In contrast, the fitment factor in the 6th Pay Commission was 1.86, which increased the basic salary of government employees by 1.86%. Now after the implementation of the 8th Pay Commission, there may be another change in the fitment factor.
How much can the salary increase be?
If the fitment factor is also increased, it can be increased from 2.57 to 2.86, which can lead to a huge jump in the basic salary of the employees.
Example- If the fitment factor is increased to 2.86, then the current minimum basic salary can increase from Rs 18,000 to Rs 51,480. At the same time, the pension for pensioners can increase from Rs 9000 per month to the minimum basic pension of Rs 25740 per month.
Let us tell you that the fitment factor plays an important role in determining the revised basic salary and pension of government employees and pensioners.
Salary Calculation under the 7th Commission
Year: 2016
Minimum Pay: Rs 18,000 per month
Maximum Pay: Rs 2.5 lakh per month (for Cabinet Secretary)
Fitment Factor: 2.57 times of basic pay
Allowances: With HRA and other allowances
Gratuity Ceiling: Rs 20 lakh, with provision for periodic increase based on DA
Pension: Minimum pension Rs 9,000 per month
Salary Calculation under Sixth Pay Commission
Year: 2006
Minimum Pay: Rs 7,000 per month
Maximum Pay: Rs 80,000 per month (for Secretary level)
Fitment Factor: Around 1.86 times of basic pay
Allowances: HRA and other allowances
Gratuity Ceiling: Rs 10 lakh
Pension: Revised with option for additional pension after retirement age
What does the Pay Commission do?
The Pay Commission will re-determine the salary and pension of employees and pensioners. After this, it is estimated that the salary and pension of central employees and pensioners will increase in 2026.
According to the recommendations of this Pay Commission, state governments also increase the salary and pension of their employees and pensioners.
The Pay Commission recommends changes in the salary and allowances as well as pension of central government employees and pensioners as well as defense forces. Usually, the Pay Commission is for 10 years. But the government has said many times that there is no time limit for it.
While reviewing the salary of employees, the Pay Commission takes into account the economic conditions, inflation, fiscal position of the government as well as many other factors.
It is also important to know here that the government doesn't need to accept the recommendations of the Pay Commission.
If it wants, it can refuse to accept the recommendations of the Commission. Many times, governments have increased the salary beyond the recommendations of the Commission.
Like the Sixth Pay Commission had recommended a fitment factor of 1.74. But the government increased it to 1.86. After the recommendations of the Pay Commission come, it needs the approval of the Union Cabinet.
The Pay Commission only reviews the salary. It does not do anything about the dearness allowance. The government takes the decision on dearness allowance.
It is usually increased twice a year, once in January and the second time in July. The central government has decided to constitute the Eighth Pay Commission at a time when employees are getting a dearness allowance equal to 53 percent of their basic salary from July 1, 2024. An increase in the dearness allowance of these employees is to happen in January 2025 itself.
What is The Fitment Factor?
The previous Seventh Pay Commission was implemented from January 1, 2016. In this, the minimum salary of the employees increased from seven thousand to 18 thousand rupees per month.
That is, the Pay Commission had recommended to increase the salary by 2.57 times the basic salary. This increase is called the fitment factor. That is, we can say that the fitment factor in the Seventh Pay Commission was 2.57.
Now, seeing the way inflation is increasing, the employees hope that the fitment factor in this Pay Commission can be up to 2.86. If the Eighth Pay Commission decides the fitment factor to be 2.86, then the basic salary of the employees will increase to Rs 51,480.
At the same time, the minimum pension can increase from Rs 9,000 per month to Rs 25,740 per month. This fitment factor plays a major role in deciding the salary and pension of central government employees and pensioners.
Earlier, the Sixth Pay Commission was implemented from January 1, 2006. In this, the minimum salary was increased from Rs 2750 per month to Rs 7000 per month.
Pay commission is usually constituted every 10 years. The first pay commission in the country was constituted in 1946. Since then, seven pay commissions have been constituted. The Seventh Pay Commission was constituted in 2014. Its recommendations were implemented on January 1, 2016.
How will the 8th Pay Commission be implemented?
2. The 8th Pay Commission will also have a chairman and two other members. Their names have not been announced yet. The government can soon announce the names of the chairman and members. Apart from these, it also has a group of economists, administrative officers, and experts.
3. After formation, the commission will study all those aspects which will play a role in the salary increase of government employees. The commission will review the salary of pensioners, their allowances and other types of financial benefits. Along with this, the commission will study by adding topics like Consumer Price Index (CPI), increase in house rent.
4. After discussing all the aspects, a fitment factor will be made. In the 6th Pay Commission, the fitment factor was 1.86 and, in the 7th, Pay Commission it was 2.57. The more the fitment factor is decided, the more times the basic salary and pension of the employees increase.
5. After studying everything, the Pay Commission presents its recommendations in the report to the government.
6. The government approves the commission's report and fixes the date. After that, the new salary and pension are decided.
Every pay commission is applicable for 10 years. The 7th pays commission's term is till 31 December 2025. That is, the government can implement the new pay commission in 2026.
When the pay commission is implemented, it is expected that government employees and pensioners will get a good increase in monthly income. For example, if we highlight the report of the previous pay commission, the minimum salary was increased from 7 thousand to 18 thousand. Because the fitment factor was 2.57. The minimum pension was also fixed at 9 thousand rupees. Also, the maximum salary cap was increased from 80 thousand to 2.5 lakh.
