The central government has approved the 8th Pay Commission. According to Union Minister Ashwini Vaishnav, the 8th Pay Commission will be set up in 2026, when the term of the 7th Pay Commission ends. With the new pay commission, a significant increase in the salary and pension of central employees is expected. This will be determined by the fitment factor. Let’s understand what the fitment factor is and how much the salary and pension of central employees can increase.

How Will the Salary Increase?

The Pay Commission recommends salary increases for employees based on the fitment factor. The fitment factor is a multiplier used to calculate the salary and pension of government employees. It is decided by considering factors such as inflation, employee needs, and the government’s financial capacity.

Factors Influencing the Fitment Factor:

Inflation Rate: The Pay Commission looks at how inflation has increased and its effect on the employee’s lifestyle, such as the difficulty in buying a house or a car.

Focus on Expenses: While recommending the new salary, the Pay Commission takes into account expenses like rice, wheat, pulses, vegetables, milk, sugar, oil, fuel, electricity, water bills, entertainment, festivals, and marriage.

Economic Situation: The financial condition of the country is also considered. If the economy is growing well, there is more scope for a higher salary increase.

Performance of Employees: The Pay Commission considers the overall performance of the employees. If performance is good, it positively impacts the salary recommendations.

Market Comparisons: The Pay Commission also examines salary hikes offered by private companies to ensure a competitive salary for central government employees.

How Much Will the Minimum Salary Increase?

Financial experts estimate that the fitment factor in the 8th Pay Commission could be between 2.6 to 2.85. Based on this, the salary of central government employees may increase by 25 to 30 per cent. This would result in a minimum salary of over Rs 40,000, including allowances and performance pay. Pensioners will also benefit proportionately.

How Was the Salary Decided in the 7th Pay Commission?

In the 6th Pay Commission, the minimum salary was Rs 7,000 per month. In the 7th Pay Commission, it was increased to Rs 18,000 per month. This indicates that the fitment factor in the 7th Pay Commission was 2.57 times, resulting in a 14.2 per cent salary increase for central employees.