8th Pay Commission: What It Means For Government Employees, How Much It Will increase Your salary, What Is Fitment Factor, Know Everything

On January 16, Union Minister Ashwini Vaishnaw announced that Prime Minister Narendra Modi has approved the formation of the 8th Pay Commission, which will determine salary and pension revisions for central government employees.

The commission will soon have a chairperson and two members, and its recommendations will be implemented starting January 1, 2026.

Once enforced, the new pay structure will benefit 50 lakh central government employees and 65 lakh pensioners.

What Is The Pay Commission?

The Pay Commission is a government body responsible for reviewing and recommending salary, allowances, and pension structures for central government employees and pensioners.

It however functions under the Ministry of Finance and typically consists of a chairperson and two members.

The commission assesses economic conditions and advises the government on necessary revisions to maintain a fair standard of living for employees.

While its recommendations are influential, the government is not legally bound to accept them. Historically, a new Pay Commission has further been constituted every 10 years.

History Of Pay Commissions In India

The first Pay Commission was set up in 1946, chaired by Srinivasa Varadachariar. It however recommended a minimum salary of ₹55 and a maximum of ₹2,000.

Over the years, subsequent commissions have progressively increased salaries:

• 2nd Pay Commission (1957): Minimum salary ₹80
• 3rd Pay Commission (1973): Minimum salary ₹185
• 4th Pay Commission (1986): Minimum salary ₹750
• 5th Pay Commission (1997): Minimum salary ₹2,550
• 6th Pay Commission (2006): Minimum salary ₹7,000 (introduced Grade Pay and Pay Band; pension raised from ₹1,275 to ₹3,500)
• 7th Pay Commission (2016): Minimum salary ₹18,000; pension raised to ₹9,000

Fitment Factor: The Key To Salary Hikes

The fitment factor is a multiplier used to revise basic salary and pensions. It ensures that employees maintain their purchasing power amid inflation.

The factor is determined based on economic conditions, government resources, and employee needs.

For example, if an employee’s basic salary is ₹10,000 and the fitment factor is 2.8, the revised salary would be ₹28,000 (excluding allowances such as HRA, medical benefits, etc)

Impact Of The 7th Pay Commission

The 7th Pay Commission was announced on February 28, 2014, and was chaired by former Supreme Court Justice Ashok Kumar Mathur.

It recommended a fitment factor increase from 2.25 to 2.57, which resulted in:

• Basic salary increase from ₹7,000 to ₹18,000
• Minimum pension increase from ₹3,500 to ₹9,000
• IAS officers’ salary increased from ₹21,000 to ₹47,250 (with a total increase to ₹56,100, including allowances)
• Government Secretary salary rose from ₹80,000 to ₹1,80,000, with a minimum pay of ₹2.25 lakh

The Aykroyd Formula, which considers essential needs like food, clothing, and housing, was used to determine salary increments under the 7th Pay Commission.

What To Expect From The 8th Pay Commission?

The 8th Pay Commission’s recommendations will be implemented on January 1, 2026.

Employees are eager to understand the potential salary hikes.

Currently, central government employees receive Dearness Allowance (DA) of 53%, which will likely increase twice before 2026, reaching approximately 65%.

If the government raises the fitment factor from 2.57 to 2.86, salaries would be revised significantly:

• Current basic salary of ₹18,000 with 65% DA becomes ₹29,700
• With a 2.86 fitment factor, the new salary would be ₹51,480

Including allowances like HRA, transport, and medical benefits, total salary could rise to ₹40,000 per month

This means instead of a ₹33,480 increase, employees might see a more moderate rise of ₹11,480 per month.

While exact figures will be confirmed once the 8th Pay Commission submits its report, government employees are hopeful for a significant salary and pension revision in 2026.

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