8th Pay Commission: From Peons to Officers, Who Will See the Biggest Salary Hike? 

8th Pay Commission Salary: Following the establishment of the 8th Pay Commission, approximately 50 lakh central employees and over 65 lakh pensioners across the nation are focused on one key question: what will be the rise in their in-hand and basic salary once the new Pay Commission is put into effect.

In the recent consultation meetings, the National Council-JCM (NC-JCM) Staff Side along with the All India Defence Employees Federation (AIDEF) have put forth their official requests to the Commission. This time around, the unions are not only asking for a higher fitment factor but are also suggesting the merging of several pay levels. Let’s explore how much salary increases for employees at various levels could be in comparison to the 7th Pay Commission, based on estimates and the unions’ demands.

Understanding the Role of ‘Fitment Factor’

The fitment factor is crucial in salary adjustments. It serves as the multiplier that converts the old basic pay into the new basic pay. In the 7th Pay Commission, this factor was set at 2.57 times. This time, employee unions are requesting a fitment factor of 3.833 from the government, which would lead to an unprecedented salary increase.

Nevertheless, financial institutions like Kotak Institutional Equities and Ambit Capital suggest that the government might keep it within the range of 1.83 to 2.46 times to ensure fiscal stability. Some analysts speculate that the government could establish it at around 3.0 times, considering inflation.

Comparing 7th CPC and 8th CPC: What Will the Salary Increase Be?

If the government opts for the minimum base scenario, which is a fitment factor of approximately 1.8 to 2.28 times, where the dearness allowance (DA) is incorporated into the basic pay, the comparison of basic salaries across different pay matrix levels would appear as follows:

Employee Unions Propose Minimum Wage of Rs 69,000

Should the government agree to the employee unions’ (NC-JCM) requests for a 3.833 fitment factor and the merging of pay scales, the salary structure would experience a substantial increase. Their proposed chart is as follows:

Proposed Level 1 (Existing Level 1): Minimum basic pay demanded to be increased directly from Rs 18,000 to Rs 69,000.

Proposed Level 2 (merger of existing Level 2 and 3): Basic pay proposed to be increased directly to Rs 83,200.

Proposed Level 3 (merger of existing Levels 4 and 5): New minimum basic pay sought to be Rs 1,12,000.

Proposed Level 4 (Existing Level 6): Demand to increase the basic pay from Rs 35,400 to Rs 1,35,700 directly.

Proposed Level 5 (merger of existing Level 7 and 8): Minimum basic pay proposed to be Rs 1,82,500.

What will be the impact of DA merger and allowances?

Once the 8th Pay Commission is implemented, the existing dearness allowance (DA) will be fully integrated into the basic salary. After this, DA will be reduced to zero for future calculations. House rent allowance (HRA) is calculated based on city categories X, Y, and Z, i.e., 30%, 20%, and 10%. Therefore, when the basic pay increases, the HRA directly received will also double. The same rule will apply to travel allowance (TA).