Millions of central government employees and pensioners, who have been waiting for some progress regarding the Pay Commission for a long time, can now breathe a sigh of relief. The government has approved the Terms of Reference (ToR) of the 8th Central Pay Commission and finalized the names of the panel members.
As always, this time too, the Commission will not only review salaries but also determine the formula used to calculate salaries in the future. Only after the Commission’s recommendations are implemented does the government determine the fitment factor. This factor determines both the basic salary of employees and the pension of pensioners. Simply put, it acts as a multiplier, meaning the higher the factor, the higher the salary.
How much salary can increase
Suppose an employee’s basic salary is currently ₹35,000. If a fitment factor of 2.57 (as in the 7th Pay Commission) is applied, the new salary will be ₹35,000 × 2.57 = ₹89,950. Now, if this factor is set between 2.0 and 2.5 in the 8th Pay Commission, the new salary figure could range from ₹70,000 to ₹87,500. This means that an employee’s salary could increase by more than ₹30,000 in one go.
See the math
If someone’s current total salary is ₹45,000 per month, it includes basic pay, DA, HRA, and other allowances. Let’s assume that this salary includes a basic pay of ₹18,000. In the 7th Pay Commission, this was multiplied by 2.57. If the same formula is applied to increase the salary by approximately 3.0 or 3.1 times in the 8th Commission, the new basic salary could be approximately ₹54,000 to ₹56,000.
Now, if 35-42% DA and other allowances are added to this, the total salary could reach approximately ₹78,000 to ₹85,000 per month. This means that a typical government employee earning ₹45,000 could see an increase of approximately ₹30,000 to ₹40,000 in monthly income.
The current 7th Pay Commission has been in effect since 2016, and a new commission is typically implemented every 10 years. It is estimated that the 8th Pay Commission may be implemented from 2028. However, this has not yet been officially confirmed by the Finance Ministry.
