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8th Pay Commission: In a big move to benefit lakhs of Central government employees, the Union Cabinet on Thursday decided to set up the 8th Pay Commission to revise salaries of central government employees and allowances of pensioners. The decision to set up the 8th Pay Commission was taken as the term of the 7th Pay Commission will end in 2026. There are over 49 lakh central government employees and nearly 65 lakh pensioners who will be benefitted from this move.
The Centre said that the new Pay Commission in 2025 will ensure that its recommendations are received well before the completion of the term of the seventh pay panel.
It should be noted that the government since 1947 has constituted seven pay commissions and these pay commission play a key role in deciding salary structures, benefits and allowances for government employees.
The government employees must note that the 7th Pay Commission was constituted in 2014 and its recommendations were implemented on January 1, 2016.
8th Pay Commission: How much salary hike expected
The new commission is expected to suggest an increase in the salary of the Central government employees between 25% and 35% with better allowances such as DA, HRA, and TA. Apart from this, the retirement benefits for pensioners could also be enhanced by up to 30%.
What is a fitment factor?
The Central government employee smust note that the fitment factor is a multiplier used to calculate the revised pay of central government employees and pensioners. Moreover, it is a key component of the Pay Commission and is used to increase salaries and pensions after recommendations of the new commission are implemented.
How fitment factor helps in salary hike?
In general, the Pay Commission recommends a common fitment benefit of 2.57 for all central government employees. On the basis of this fitment factor, the basic pay for central government employees increased to Rs 18,000 per month from the earlier basic salary of Rs. 7,000 (2.57 times the basic pay of the 6th Pay Commission).
Objective of 8th Pay Commission
The primary objective of the 8th Pay Commission is to recommend pay, benefits, and pensions of the central government employees (CGEs) that align with current economic conditions and inflation rates.
When 8th Pay Commission to be implemented?
Even if specific date has been officially announced for implementation of the 8th pay commission, it is anticipated that the recommendations from the commission will be implemented starting January 1, 2026.
How much DA hike, HRA will increase?
According to the recommendations of the new Pay Commission, HRA will be adjusted based on the DA increase. The
Type X cities: 30% of basic pay
Type Y cities: 20% of basic pay
Type Z cities: 10% of basic pay
Example Calculation: For an employee with a basic pay of Rs35,000:
Type X city: Rs 10,500
Type Y city: Rs 7,000
Type Z city: Rs 3,500
What other allowances to increase?
Children’s Education Allowance
Special Allowance for Childcare
Hostel Subsidy
Transport Allowance on Transfer
Gratuity Ceiling
Dress Allowance
Mileage Allowance for Own Transport
Daily Allowance
