8th Pay Commission: Cabinet approved ToR, Basic salary will be Rs 30,000? Know fitment factor 

8th Pay Commission: Big news for central government employees. After a long wait, the 8th Pay Commission has now been constituted. On October 28, the Union Cabinet approved its rules and responsibilities. The Commission will be chaired by Justice Ranjana Prakash Desai. Professor Pulak Ghosh will serve as a member, and Pankaj Jain will be the member-secretary. Currently, Pankaj Jain is the Secretary of the Department of Petroleum and Natural Gas.

The government announced the formation of the 8th Pay Commission on January 16. Before approving the rules, several discussions were held with ministries and departments, including the views of the Joint Consultative Machinery (JC) representing employees. The Commission is required to submit its recommendations within 18 months.

The 8th Central Pay Commission is now expected to be implemented by late 2026 or early 2027, which is good news for government employees. Kotak Institutional Equities notes in its report that this timing is also appropriate based on the experience of previous pay commissions. Typically, a pay commission takes approximately one and a half years (1.5 years) to be implemented after it is announced by the government.

How much can the salary increase be?

According to reports, after the 8th Pay Commission, the minimum basic pay for employees could rise to around Rs 30,000 per month. Currently, this amount is Rs 18,000 per month. This means employees can expect a significant increase. Additionally, the commission may consider increasing the “fitment factor” to 1.8. The fitment factor is the number by which the old salary is multiplied to determine the new salary. If it is 1.8, the overall salary increase for employees will be approximately 13%.

The report also states that this salary increase will have a significant financial impact on the government. Kotak estimates that the 8th Pay Commission could result in additional expenditure of approximately 0.8% of the country’s GDP. This means an additional burden of approximately Rs 2.4 to Rs 3.2 lakh crore on the government treasury.