8th Pay Commission: The 8th Pay Commission to be constituted by the central government was approved by cabinet decision in January 2025, whereby it is expected that salaries and pensions of possibly about 50 lakh central employees and 65 lakh pensioners will be increased. Let’s take a closer look at this news.
Fitment Factor And Salary Hike
Typically salary hikes by the Pay Commission are made according to the Fitment Factor. An increase in the basic salary by 40-50% is possible if the Fitment Factor remains above 2.86. For example, the basic salary of an employee currently drawing Rs 20,000 will have a possible salary enhancement between Rs 46,600 and Rs 57,200.
Implementation Procedures Of The Commission
The implementation of the recommendations of the 8th Pay Commission will tentatively commence in 2026, as the tenure of the 7th Pay Commission will come to an end. In the opinion of experts, normally the commission takes about a year to finalize its recommendations, thus from January 1, 2026, the implementation is possible.
Possible Delay And Budgetary Provisions
However, in Budget 2025, the expenditure of the central government in implementing the 8th Pay Commission was not mentioned, giving rise to speculation of a delay in its implementation. Expenditure Secretary Manoj Goel has stated that the 8th Pay Commission will not have any financial bearing in the financial year 2025-26.
Terms Of Reference (ToR) Of The Commission
The terms of reference (ToR) of the 8th Pay Commission i.e. the working procedure of the commission will be determined before April 2025. The government can also finalize the name of the chairman and other members of this commission.
Employee Expectations
Preference for a fitment factor to be at least 2.57; Otherwise, a lower fitment factor would operate against any substantial salary increase that can be legitimately expected. For instance, if an employee’s current basic salary were Rs 20,000, it could be calculated that his new salary would be Rs 20,000 × 2.86 = Rs 57,200.
Further Process
Once the Commission is in place, a committee would be formed with the task of appraisal and finalization of the recommendations. When its work is complete, the committee shall submit its report to the central government. It has been reported that by the end of this month, a committee membership shall get finalized.
All in all, the implementation of the 8th Pay Commission is expected to be the means through which major salary and pension increases will come about for the central employees and pensioners. But the actual salary hike and the implementation schedule will depend upon the recommendations of the commission and the subsequent decision by the government.
