The announcement of the 8th Pay Commission by Prime Minister Narendra Modi has sparked widespread interest among central government employees. With the 7th Pay Commission set to conclude on December 31, 2026, the formation of the 8th Pay Commission marks a significant step towards revising salaries and pensions. This blog delves into the potential salary revisions under three projected fitment factors: 2.08, 2.28, and 2.57, for employees with basic pays of ₹18,000, ₹29,200, and ₹44,900.
Pay commissions are constituted to review and revise the salaries, allowances, and pensions of central government employees. These revisions are based on a key multiplier known as the fitment factor, which determines the increase in basic pay. While the central government sets the precedent, state governments often follow suit to adjust their employees’ salaries accordingly.
The fitment factor is a crucial element in calculating revised salaries and pensions. It is multiplied by the existing basic pay to determine the new salary structure. For instance, a fitment factor of 2.57 means the basic pay will increase by 2.57 times its current value.
Even in the absence of a pay commission, central government employees experience salary increments through the dearness allowance (DA). When the DA reaches 50% of the basic pay, it merges with the basic salary, effectively increasing the overall pay. This mechanism ensures periodic salary revisions, independent of pay commission recommendations.
The 7th Pay Commission, implemented in 2016, introduced a fitment factor of 2.57. This resulted in a significant hike in basic salaries and pensions for central government employees. The commission’s recommendations have been in effect for nearly a decade, making the announcement of the 8th Pay Commission a highly anticipated development.
While the 8th Pay Commission has been announced, its recommendations are yet to be finalised. The commission’s formation, appointment of members, and submission of reports will take time, with the entire process likely extending beyond a year. Speculations suggest potential fitment factors of 1.92, 2.08, 2.28, or 2.57.
Below, we explore the projected salary revisions for employees with basic pays of ₹18,000, ₹29,200, and ₹44,900 under three fitment factors: 2.08, 2.28, and 2.57.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Feb 6, 2025, 1:48 PM IST
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