8th Pay Commission Update: Big Blow for Government Employees? Report Hints at Just 13% Hike

Government employees and pensioners are eagerly waiting for the 8th Pay Commission. It is expected that salaries and pensions will increase based on inflation. Government employees are hoping for a good hike. But a recent report by Kotak Institutional Equities about the 8th Pay Commission may disappoint them.

What Does Kotak’s Latest Report Say?

Kotak Institutional Equities has said in a report that central government employees may get only a 13% salary increase under the 8th Pay Commission. This is less than the 14.3% increase given in the 7th Pay Commission.

As per the report, the fitment factor this time may be 1.8. In the 7th Pay Commission, it was 2.57. This means the new basic salary will be fixed by multiplying the current basic pay by 1.8. But the dearness allowance (DA) will start from zero. So, the total salary increase may not be very big.

Basic Pay Will Increase, But DA May Be a Problem

The basic salary will go up when the 8th Pay Commission starts. For example, if an employee’s current basic pay is ₹18,000, it may become ₹32,000 with a 1.8 factor. But right now, the employee is getting ₹9,900 as DA (55%), so the total pay is ₹27,900. In the new system, since DA will be zero, the benefit will be less.

In the same way, if someone’s basic is ₹50,000, the new basic may go up to ₹90,000. But the current DA of ₹27,500 will not be added, so the actual increase will be from ₹77,500 to ₹90,000 only.

Employees Want Same Fitment Factor as Before

Employee unions say the fitment factor should be the same as the 7th Pay Commission — that is, 2.57. But reports say the government may not agree and may keep the fitment factor low.

Experts also say that even if the basic salary looks bigger, the real benefit will depend on how DA is added again in the new salary.

When Will the 8th Pay Commission Start?

The government may start the 8th Pay Commission process in the next few months. If things go well, it can be applied from January 1, 2026. If there is any delay, then the government may give arrears to the employees and pensioners.