8th Pay Commission Salary Hike Update: 1.86 Or 2.46 Fitment Factor? How Will Salary & Pensions Rise?

Once again hope is pinned on good news from the government during Diwali in regard to the 8th Pay Commission. As per the latest update, the Centre has assured the Government Employees National Confederation (GENC) that they are actively consulting both state governments and constitutions over the implementation of the 8th CPC and an announcement will be made soon.

8th Pay Commission Latest Update:

The Government Employees National Confederation (GENC), who is the apex body representing lakhs of Central and State Government employees, including those in Autonomous and Local Bodies, has recently written to Dr. Jitendra Singh, the Union Minister of State for Personnel, Public Grievances and Pensions.

As per the letter written, the apex body asked about the immediate constitutions of 8th Central Pay Commission CPC). Here's what the letter said:

The recommendations of the 7th CPC came into effect from 01.01.2016. As per established practice. Pay Commissions are constituted well in advance to ensure timely implementation. Delay in setting up the 8th CPC will adversely affect the timely pay revision due January 1, 2026.

Hence. the Government should immediately constitute the 8th CPC to examine and recommend revised pay structures, allowances, and pensionary benefits for Central Government employees and pensioners.

Reply: As per reports, the minister revealed GENC that they are actively in consultation with state governments and the constitution of 8th CPC.

The Prime Minister Narendra Modi-led government declared to implement the 8th Pay Commission in January this year. However, major decisions like terms of reference and appointment of members is pending.

The terms of reference is meant to be the basis of revising salaries and pensions of approximately 49 lakh central employees and 65 lakh pensioners.

As per many reports, the delay in the above-mentioned process is likely to push the implementation date of 8th CPC beyond January 2026. Expectations are that the 8th CPC could be implemented as early as 2028.

It also needs to be noted that it took about 27 months to implement the 7th CPC in 2016, from the date of the official notification.

8th Pay Commission Fitment Factor:

As per brokerages, the fitment factor for 8th CPC could be either 1.83 or 2.46. However, the current the dearness allowance (DA) of 55% is expected to be reset to zero when 8th CPC is implemented.

This reset means that while the fitment factor may increase basic salaries substantially, the effective hike will be slightly lower due to the removal of the DA, as per ClearTax report.

Here's an example by ClearTax:

- For instance, an employee with a basic salary of Rs 18,000 could see their salary rise to Rs 32,940 at the lower end of the fitment factor (1.83) and Rs 44,280 at the upper end (2.46).

- For employees earning a higher base salary, such as Rs 50,000, the revised salary could increase to Rs 91,500 at the lower end and Rs 1.23 lakh at the upper end.

8th Pay Commission Salary Hike: