The current salary structure, based on the 7th Pay Commission's guidelines, was implemented from January 1, 2016.
8th Pay Commission latest news
: In good news for central government employees, Prime Minister Narendra Modi-led Union Cabinet has given its nod for the constitution of the 8th Pay Commission. With this,
central government employees
can look forward to a salary hike.
PM Modi shared on X: "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 decision comes months after the dearness allowance for central government employees crossed 50% of central government employees' basic salary. From July 1, 2024, central government staff and pensioners have been receiving 53% of their basic pay as dearness allowance/relief, with the next adjustment scheduled for January 2025.
8th Pay Commission: How much salary hike to expect?
The current salary structure, based on the 7th Pay Commission's guidelines implemented from January 1, 2016, will be updated after the 8th Pay Commission recommendations. ET consulted experts regarding potential salary increases, considering historical pay commission recommendations.
Krishnendu Chatterjee, TeamLease Vice President, was quoted as saying, "The Last Pay Commission was established in 2016, which recommended the minimum pay jump from 7,000 per month to 18,000 per month with a fitment factor of 2.57 times of basic pay. The maximum ceiling is 2.5 lakhs per month. Considering the inflation factor, there are indications that the fitment factor may stay between 2.5- 2.8 times, which will give a significant boost to employee salaries between Rs 40,000 and Rs 45,000. There are also suggestions of Performance based pay hike which are still under deliberation."
Also Read | 8th Pay Commission: Cabinet approves constitution of 8th Pay Commission; central government employees eye pay hike
According to Rohitaashv Sinha from King Stubb & Kasiva, "Pay commissions are in most cases established every 10 years to assess and provide changes to the remunerations of central government employees. The last pay commission, i.e. the 7th pay commission took effect in January 2016 and gave a raise on the minimum basic pay from Rs 7000 to Rs 18000 using the fitment factor 2.57. In the 8th Pay Commission, it is believed that the increase the minimum basic pay will be an astonishing 186%. This may make the minimum basic pay to INR 51,480 per month. It seems that the fitment factor for it is 2.86. The changes are likely to be implemented through the Central Civil Services (Revised Pay) Rules, 2025 and may lead to enhanced pension and other retiral benefits such as EPF, Gratuity etc. and recommend changes in salary structures for government employees."
SKV Law Offices' Senior Associate Nihal Bhardwaj explains that historical data suggests central government staff might receive a 25-30% pay rise under the 8th Pay Commission. The 6th Pay Commission (Effective from January 1, 2006, covering the period 2006–2016) utilised a 1.86 fitment factor, delivering a 40% increase in wages, whilst the 7th Pay Commission (Effective from January 1, 2016, covering the period 2016–2026) employed a 2.57 fitment factor, yielding approximately 23-25% higher salaries.
Staff associations are currently pushing for a fitment factor between 3.0 and 3.5, which could potentially elevate the minimum basic salary from Rs 18,000 to roughly Rs 25,000–Rs 26,000. Such adjustments would result in substantial improvements across all pay grades, he said.
8th Pay Commission: What is the fitment factor?
- The fitment factor serves as a multiplication coefficient employed to determine the revised compensation for central government staff and retirees. It represents an essential element of the Pay Commission, utilised when implementing salary and pension increases following new commission guidelines.
- The variation in grade pay assessment and irregular spacing between pay bands directly influences the quantum of fitment benefits. This inconsistency led numerous stakeholders to advocate for the implementation of a uniform fitment factor applicable across all employee categories.
- The 7th Pay Commission established a standard fitment benefit of 2.57 applicable to all central government employees. This factor resulted in raising the minimum basic pay to "Rs 18,000" monthly from the previous "Rs. 7,000" (2.57 times the basic remuneration under the 6th Pay Commission).
- A practical demonstration helps explain how public sector workers can determine their revised salary using the fitment factor set by the 8th Pay Commission. Consider a scenario where your current basic pay is Rs 40,000 monthly, and let’s assume that the 8th Pay Commission suggests a fitment factor of 2.5. This calculation would raise your basic salary to Rs 1 lakh per month.
- Initially, dearness allowance remains excluded, as per typical pay commission guidelines. The dearness allowance component gets incorporated into the salary structure during subsequent years, following pay commission recommendations. Additional allowances might undergo modifications based on the pay commission's directives.
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