8th Pay Commission : Central government employees are eagerly awaiting the Eighth Pay Commission. The government has announced that a notification regarding this will be issued soon, and work is underway. There are many speculations about the salary increase this time. The main focus is on the fitment factor of 2.86. If implemented, the basic salary of central government employees could increase significantly, reaching almost three times.
As Diwali approaches, matters like salary, allowances, and bonuses become topics of discussion among employees. The current topic of discussion among government employees is the 8th Pay Commission. Every employee wants to know the fitment factor, how much the basic salary will increase, and how much allowances will increase.
Basic salary is determined by the fitment factor, which is said to be 1.92, 2.86, or something in between. Allowances like DA and HRA are determined based on the basic salary. It is being said that this time DA (Dearness Allowance) will be adjusted in the basic salary. However, House Rent Allowance (HRA) will be determined according to the old formula.
How is the rate of HRA decided?
House Rent Allowance (HRA) is a significant component of the salary of central government employees. Its rate is set to cover a certain portion of the rental expense. The HRA rate depends on the city category. For example,
27% for Category X (Metropolitan cities)
18% for Y category (medium cities)
9% for Z category (small towns)
What is the rule for increasing HRA?
Under the 7th Pay Commission, the government had decided that when the dearness allowance (DA) exceeds 25%, the HRA rates would also be increased. In July 2021, a Cabinet Committee chaired by Prime Minister Narendra Modi approved raising the DA to 28%, following which the Finance Ministry also revised the HRA rates. Previously, the HRA rates under the 7th Pay Commission were 24%, 16%, and 8%, which were increased to 27%, 18%, and 9%.
It’s important to note that these calculations are based on estimates. The government has yet to make a formal announcement regarding the 8th Pay Commission, but it’s believed that government employees may soon hear some news that will bring smiles to their faces.