8th Pay Commission Update: Central Govt Employees to Get 10-30% Salary Hike, Know Fitment Factor Calculation

This month, the central government announced the 8th Pay Commission, which will submit its report by the end of the year. Many speculations are being made about the salary hike for central government employees. According to a report by News18 English, employee salaries may increase by 10% to 30%.

Former Finance Secretary of India, Subhash Chandra Garg, said in a media interview, “NC-JCM (National Council of Joint Consultative Machinery) can demand the moon. The fitment factor of 2.86% is like asking for the moon, which is impossible to get.” He also mentioned that to determine the fitment factor, the Pay Commission will consider the basic salary and dearness allowance (DA) as of January 1, 2026.

What is the Fitment Factor? How is it Decided?

The fitment factor is a multiplier applied to the current basic salary to calculate the new salary under the revised pay matrix. Currently, the Dearness Allowance (DA) is 53% (till July 1, 2024). To calculate the DA by January 1, 2026, two more instalments will need to be added—one on January 1, 2025, and the other on July 1, 2025. According to Subhash Chandra Garg, if a 7% increase is assumed, the DA will rise to around 60% by January 1, 2026.

Garg further explained, “With an initial factor of 1.6, the next step is to decide the percentage increase. Usually, pay commissions recommend a hike ranging from 15% to 30%. The previous pay commission recommended a hike of about 14-15%. I estimate that the additional fitment factor applied to the base factor of 1.6 could be between 10% and 30%.”

For instance, if the base factor of 1.6 is taken, a 20% increase (which is 32) will give a revised fitment factor of 1.92. If a 30% increase is considered, a 30% of 160 (which is 48) added to the base factor will give a revised fitment factor of 2.08. Thus, the actual fitment factor is likely to range between 1.92 and 2.08.

8th Pay Commission

For the 8th Pay Commission, it was widely expected that the fitment factor would increase to 2.86, potentially raising the minimum basic pay to Rs 51,480. This would be an 186% increase from the current Rs 18,000.

On January 16, the Union Cabinet approved the 8th Pay Commission. Union Information and Broadcasting Minister Ashwini Vaishnaw announced, “The 8th Pay Commission will be established in 2025, allowing enough time for its recommendations to be implemented before the 7th Pay Commission period ends.”

When Will the 7th Pay Commission End?

Under the 7th Pay Commission, the fitment factor was fixed at 2.57, which increased the minimum basic pay from Rs 7,000 to Rs 18,000. For the 8th Pay Commission, it was widely expected that the fitment factor could increase to 2.86, raising the minimum basic pay to Rs 51,480. This would represent a 186% increase over the current Rs 18,000.

On January 16, the Union Cabinet approved the 8th Pay Commission. Union Information and Broadcasting Minister Ashwini Vaishnaw announced that the 8th Pay Commission will be set up in 2025, ensuring that the recommendations can be implemented before the 7th Pay Commission’s term ends.

The term of the 7th Pay Commission will conclude on December 31, 2025, marking 10 years since its implementation on January 1, 2016. Therefore, the 8th Pay Commission will come into effect from January 1, 2026. Central government pensioners will also receive higher pensions from January 2026.