The Union Cabinet has approved the formation of the 8th Pay Commission on January 17, 2025 to revise the salaries and pensions of central government employees and pensioners.
The commission is expected to submit its recommendations by January 1, 2026.
Therefore, it is anticipated that the 8th Pay Commission will be implemented from January 1, 2026, following the standard 10-year interval between Pay Commissions.
Pay Matrix
The 7th Pay Commission recommended a fitment factor of 2.57 for all central government employees. [Note: A fitment factor is a multiplier used in pay revisions to calculate the new basic salary from the existing basic salary.]
Simple Calculation:
- Assuming lowest basic pay under 6th Pay Commission: ₹7,000
- Fitment Factor: 2.57
New Basic Pay = (6thPay Commission Basic Pay) × Fitment Factor
= (7,000×2.57)
= 17,990
So, the basic pay of ₹7,000 under the 6th Pay Commission, becomes of ₹18,000 under the 7th Pay Commission, using the fitment factor of 2.57.
Expectation from 8th Pay Commission
Predicting the exact increase in income following the 8th Pay Commission is challenging.
A fitment factor between 2.6 and 2.85 could result in a 25-30% increase in basic pay, along with proportional pension hikes.
Experts suggest that minimum basic salary under the 8th Pay Commission is expected to be over ₹40,000 per month. This is a significant increase from the ₹18,000 per month under the 7th Pay Commission
The 8th Pay Commission is expected to bring several benefits for central government employees and pensioners. These benefits aim to improve the overall well-being and financial security of central government employees and pensioners
Here are some key benefits
- Revised Pay Structure: Basic salaries are expected to increase by 20% to 35%, enhancing take-home pay and ensuring better living conditions and financial stability for central government employees.
- Enhanced Allowances: Allowances such as Dearness Allowance (DA) and other benefits will be reviewed and potentially increased to reflect current economic conditions.
- Medical Benefits: Enhancements to the Central Government Health Scheme (CGHS) will be recommended, ensuring cashless and hassle-free medical services for employees and pensioners.
- Economic Impact: Higher salaries and allowances are expected to stimulate consumption and boost economic growth.
- Career Progression: The commission aims to address issues in the Modified Assured Career Progression (MACP) scheme, ensuring at least five promotions in a career.
- Tax Revenue Increase: Increased salaries may lead to greater tax revenue collected by the government
- Pension Revisions: The commission will propose improvements to pension schemes, including merging Dearness Relief (DR) with pensions for better financial security.
Time taken between the announcements of the previous Pay Commission Committee and its formation.
- 5th Pay Commission: Announced in April 1994 and constituted in June 1994 (2 months).
- 6th Pay Commission: Announced in July 2006 and constituted in October 2006 (3 months).
- 7th Pay Commission: Approved on September 25, 2013, and formally constituted on February 28, 2014 (approximately 5 months).
How does the government put the recommendations of Pay Commissions into effect
- Submission of Report: The Pay Commission submits its report detailing recommendations on pay structures, allowances, and pensions.
- Review by Committee: The government sets up a fitment or empowered committee to analyze and review the recommendations.
- Cabinet Approval: The reviewed recommendations are presented before the Union Cabinet for approval.
- Issuance of Implementation Orders.
