Big news for government employees. The Modi government has given the green light for the 8th Pay Commission, which is set to kick in on January 1, 2026. However, details on how much central employees and pensioners will see their salaries and pensions rise are still up in the air. We might get some clarity during the general budget announcement on February 1.
Just to give you some context, the 7th Pay Commission was established back in February 2014, but its recommendations took effect from January 1, 2016, and will wrap up on December 31, 2025. So, the 8th Pay Commission will roll out right after that. This change is expected to benefit around 49 lakh central government employees and 65 lakh pensioners.
As for the 8th Pay Commission, there are whispers that the Modi government could boost salaries by as much as 108%. But so far, there hasn’t been any official word on the salary structure, dearness allowance, or fitment factor, which is likely to range from 1.92 to 2.08. Finance Minister Nirmala Sitharaman might drop some big news about the 8th Pay Commission during the budget presentation in Parliament on February 1.
Salary will be determined based on the fitment factor
Shiv Gopal Mishra, the secretary of the National Council of Joint Consultative Machinery, mentioned that the Pay Commission might suggest a fitment factor of 2.86, although some reports indicate it could fall between 1.92 and 2.08.
1. If the fitment factor is set at 2.08, the minimum basic salary could range from Rs 18,000 to Rs 37,440, and retired employees’ pensions might be between Rs 9,000 and Rs 18,720.
2. Should the fitment factor rise to 2.86, the minimum salary could jump from Rs 18,000 to Rs 51,480, with pensions for retirees potentially increasing from Rs 9,000 to Rs 25,740. However, this scenario seems less probable.
3. In the 7th Pay Commission, the fitment factor was established at 2.57, which raised the minimum basic pay from Rs 7,000 to Rs 18,000. After including DA, house rent allowance, and transport allowance, the total salary reached Rs 36,020.
Former Finance Secretary of India, Subhash Chandra Garg, stated in a media interview that the Pay Commission will determine the fitment factor based on the basic salary and dearness allowance (DA) until January 1, 2026. Currently, the DA for central employees stands at 53%. By January 1, 2026, two more installments will be factored into the DA calculation—one on January 1 and another on July 1, 2025. If there’s a 7 percent increase in DA in 2025, it could rise to around 60 percent by January 1, 2026. Typically, the Pay Commission recommends a hike of 15 to 30 percent, and the government may select a fitment factor between 1.92 and 2.86.