8th Pay Commission: Central employees are eager to find out how their salaries will be adjusted. They’re particularly interested in the fitment factor that will come from the 8th Pay Commission’s recommendations and what changes this new pay commission will introduce. Many reports suggest that there could be a significant salary increase following the fitment factor adjustment. Some speculate that the fitment factor might be either 2.86 or 2.28. However, the truth is that it won’t be as high as 2.28, 2.86, or even 3 times. Instead, it will be determined based on various factors like economic conditions, inflation, and the projected dearness allowance. Given the current situation, the fitment factor is expected to be around 1.90. Let’s dive into why this is the case and how it will affect salaries.
8th Pay Commission: What salary increase can we expect?
Historically, from the 2nd to the 7th Pay Commission, salaries have seen an average increase of 27%. The 7th Pay Commission resulted in a total salary hike of 14.27%. With the establishment of the 8th Pay Commission, it will be crucial to see what salary increase the government recommends this time. Based on the current dearness allowance (DA), it could rise to between 60% and 62% by January 1, 2026. Experts predict that the DA will likely reach around 61%. Currently, the approved DA stands at 55%. If this trend continues, central employees might only see an 18% salary increase from the 8th Pay Commission. However, if there happens to be a 24% salary increase, the fitment factor could be higher, though the chances of that are quite slim.
8th Pay Commission: Understanding the fitment factor
Now, let’s discuss the fitment factor. Its value is influenced by the current dearness allowance (DA) and the salary increase determined by the government or the pay commission. If we calculate salaries based on this, the fitment factor will be derived from the dearness allowance and the salary hike. For our assumptions, let’s consider the dearness allowance to be 61% under normal circumstances.
The salary increase is expected to be around 18%. In this context, the fitment factor for central employees will stay at 1.90. This means that the new salary will be determined by multiplying the employees’ basic salary by this fitment factor.
8th Pay Commission: Are we looking at a wait until 2027?
The new pay commission is set to kick in on January 1, 2026. However, it will take some time for the recommendations to be made and put into action. Only then will we know the fitment factor for central employees and the extent of the salary revisions. Once everything is finalized, employees will receive their payments starting January 1, 2026, which means they will also get arrears for the months following the finalization. Reports suggest that it could take about 15 to 18 months for the recommendations to be released. Additionally, the commission is expected to provide an interim report before the final one, likely by May 2026. Prior to that, funding for the 8th Pay Commission might be allocated in the 2026 Budget.
8th Pay Commission: Changes in DA calculation ahead
Sources indicate that the government may revise the base year for calculating the Dearness Allowance (DA) when the new pay commission is introduced. Currently, the base year for the AICPI-IW is set at 2016, which was established during the implementation of the 7th Pay Commission. Experts believe that a change in the base year is likely with the 8th Pay Commission, as rising inflation necessitates an update to the DA calculation. There’s a chance that the new base year for the dearness allowance could be set to 2026.