8th Pay Commission: The Pay Commission serves as a governmental entity responsible for evaluating and recommending adjustments to salaries, pensions, and benefits for central government employees and pensioners across the nation. Typically, the commission issues its recommendations every decade, considering factors such as the economic climate, inflation rates, and the cost of living.
Currently, the 7th Pay Commission is in effect, and the government has sanctioned the establishment of the 8th Pay Commission as of January this year. Following the implementation of the 8th Pay Commission, there is a strong anticipation of a significant salary increase for central government employees. It is noteworthy that approximately 5 million central government employees and 6.5 million pensioners are expected to benefit from the 8th Pay Commission’s implementation.
How much salary can hike
Reports suggest that if the government allocates a budget of Rs 1.75 lakh crores, the monthly salary for employees earning Rs 1 lakh could rise to Rs 1,14,600. In scenarios where the budget allocation reaches Rs 2 lakh crores, the salary may increase to Rs 1,16,700, and with a budget of Rs 2.25 lakh crores, it could rise to Rs 1,18,800.
Formation of the panel
Furthermore, it is anticipated that the panel for the 8th Pay Commission may be established in April 2025, with its recommendations potentially being enacted by 2026 or 2027. In contrast, the previous 7th Pay Commission, which was implemented in 2016, raised the fitment factor (a metric used to determine salary increases) by 2.57 times, resulting in an increase of the minimum basic salary from Rs 7,000 to Rs 18,000.