On January 16, 2025, the Union Cabinet, under Prime Minister Narendra Modi, approved the formation of the 8th Pay Commission, aiming to boost the earnings of central government employees. This decision, announced just before the Delhi Assembly elections, is expected to improve the financial conditions of public sector workers.
Prime Minister Modi, via X (formerly Twitter), expressed the government’s commitment to supporting its workforce, stating, “We are proud of the hard work of our government employees in building a developed India. The 8th Pay Commission’s decision will enhance their quality of life and drive consumption.”
This announcement follows the increase in the dearness allowance (DA) for central government employees, which exceeded 50% of their basic pay. Starting July 1, 2024, both government employees and pensioners received 53% of their basic salary as DA, with the next revision expected in January 2025.
What Central Government Employees Can Expect from the 8th Pay Commission
The current salary structure is based on the recommendations of the 7th Pay Commission, which became effective on January 1, 2016. The 8th Pay Commission will revise this structure.
Though the exact salary hike percentage has not been confirmed, reports suggest that the fitment factor — a key multiplier in salary and pension calculations — may rise from 2.57 to 2.86. If this change happens, the minimum basic salary for government employees could increase dramatically, from Rs 18,000 to Rs 51,480.
Understanding the Fitment Factor
The fitment factor plays a crucial role in determining the revised salaries and pensions of central government employees. It acts as a multiplier to adjust the pay scale according to the recommendations of the new commission.
Under the 7th Pay Commission, the fitment factor was set at 2.57, which raised the minimum basic salary of central government employees from Rs 7,000 (under the 6th Pay Commission) to Rs 18,000. With allowances like DA, HRA, and TA, the total minimum salary went up to Rs 36,020 per month.
The 8th Pay Commission’s recommendations are expected to further enhance the salary structure and allowances, resulting in a significant increase in government employees’ overall pay.