8th Pay Commission: The central government has started consultations with key ministries and departments for the formation of the 8th Pay Commission (CPC), which will revise the salary structure of about 50 lakh central government employees and 62 lakh pensioners.
8th Pay Commission: The central government has started consultations with key ministries and departments for the formation of the 8th Central Pay Commission (CPC), which will revise the salary structure of about 50 lakh central government employees and 62 lakh pensioners. A major focus of these discussions is the fitment factor, an important parameter that directly affects how much the salary will increase after the new pay scale is implemented.
What is the fitment factor and why is it important
The fitment factor is a numerical multiplier used to calculate the revised basic pay of an employee when the new pay commission is implemented. It helps in standardizing the salary hike at various levels. In the 7th Pay Commission, the fitment factor was fixed at 2.57, which means the basic pay was multiplied by this number to calculate the new pay. According to various media reports, early estimates suggest that the 8th Pay Commission may recommend a fitment factor of up to 2.86, which will lead to a 30-34% hike in the basic pay. While the government is yet to officially confirm the new multiplier, even a modest hike could lead to improvements in both pay and pension.
How much can the salary increase
If the proposal to fix the fitment factor at 2.86 is accepted, the minimum basic pay of central government employees could increase from Rs 18,000 to Rs 51,480 – a nearly three-fold increase. This will not only impact the basic pay, but also other components of pay such as dearness allowance (DA), house rent allowance (HRA) and travel allowance (TA), which are calculated as a percentage of the basic pay. Pensioners will also benefit from this hike, as the fitment factor applies to them as well. Employee unions have been actively lobbying for this hike, arguing that a higher salary structure is necessary due to rising inflation and cost of living.
When will it be implemented
The 8th Pay Commission was approved in January 2025, but the formal notification is yet to be issued. In a recent statement in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary confirmed that discussions are on with all stakeholders. The appointment of the chairman and members of the commission will take place only after the notification is issued. Once constituted, the commission will submit its recommendations to the government, which will review and approve them. As per the general timeline followed by previous commissions, the new pay structure is likely to be implemented from January 2027.
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