8th Pay Commission – January 2026… Lakhs of government employees are eyeing this date when the term of the 7th Pay Commission will end and the timeline of the 8th Pay Commission will begin. The 7th Pay Commission did not make a big increase in the salary, due to which there are more expectations from the 8th Pay Commission. According to a report, the recommendations of the 8th Pay Commission can pave the way for a salary and pension increase of 30-34%. This will directly benefit about 1 crore employees and pensioners. But will this gift be available on time?
The purpose of setting up the pay commission
A pay commission is formed every ten years to keep government salaries competitive with the private sector. This not only provides financial strength to the employees but also helps in retaining qualified talent in the administrative system. This time the 8th Pay Commission was announced in January 2024, but its terms and conditions (ToR), members and chairman have not been decided yet. Obviously, there is a danger of delay.
There was less salary increase in the 7th Pay Commission
The 7th Pay Commission, which came into effect in 2016, recommended a mere 14.3% increase in the Basic Pay, which was the lowest increase since 1970. Although the fitment factor was 2.57, the actual pay increase was limited due to the reset of DA. The total increase including various allowances was about 23%. Earlier, the 6th Pay Commission (2006) had given a massive increase of about 54%, which had created a lot of enthusiasm among the working class.
What will be the fitment factor in the 8th pay commission?
Fitment Factor is the multiplier through which the increase in basic salary is decided. In the 7th Pay Commission, it was 2.57. A report by brokerage firm Ambit Capital suggests that this time it can be between 1.83 to 2.46. That is, if the current basic salary of an employee is Rs 18,000, then the new salary can be up to Rs 44,280 if the fitment factor is 2.46 . However, the actual benefit will come out gradually after the DA is reset.
Salary structure includes many allowances along with basic pay
Government salary includes not only basic pay but also DA (dearness allowance), HRA (house rent allowance), TA (travel allowance) and other benefits. Over time, the proportion of basic has decreased from 65% to about 50%. The share of allowances in the total salary has increased. DA is revised every 6 months based on CPI. Therefore, the impact of salary increase becomes more pronounced over time.
50% pension guaranteed in UPS
The recommendations of the 8th Pay Commission will also have a direct impact on more than 60 lakh pensioners. Since HRA and TA are not included in the pension, only basic pay and DA will change. Another major change is that from April 2025, the Unified Pension Scheme (UPS) has been implemented by amending the NPS, under which the employee is guaranteed to get at least 50% of his last salary as pension.