Big news for government employees. The government has just rolled out the 8th Pay Commission, and they’re set to deliver their report by the end of this year. Since the announcement, chatter about salary increases has been buzzing among employees. Initially, there was talk of a potential salary boost of up to 186%, but recent updates suggest that central government employees might see an increase between 10% and 30%.
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As of July 2024, the Dearness Allowance (DA) for employees stands at 53%. In a recent interview, former Finance Secretary Subhash Chandra Garg mentioned that the fitment factor, which helps determine new salaries, will be based on the basic salary and DA as of January 1, 2026. The fitment factor is essentially a multiplier that sets the new salary by applying it to the current basic salary.
With the DA at 53% as of July 2024, and considering two more DA hikes (one in January 2025 and another in July 2025), if we assume a 7% increase each time, the DA could rise to around 60% by January 2026.
Reports indicate that a salary hike of 10% to 30% is on the table, starting from an initial fitment factor of 1.6. For a 20% increase, the fitment factor would be 1.92, and for a 30% increase, it would be 2.08. Under the 7th Pay Commission, the fitment factor was set at 2.57, which raised the minimum basic salary from Rs 7,000 to Rs 18,000.
Could the fitment factor reach 2.86? Some reports suggest it might, potentially bumping the minimum basic salary up to Rs 51,480. However, experts are skeptical about such a significant increase. The recommendations from the 8th Pay Commission are expected to take effect on January 1, 2026, as the 7th Pay Commission’s term wraps up on December 31, 2025.
Pensioners will also gain from this decision
Central government pensioners will see an increase in their pensions starting January 2026, thanks to this government decision. It’s worth noting that a new pay commission is introduced every ten years. The 6th Pay Commission took effect on January 1, 2006, and the 7th Pay Commission was implemented on January 1, 2016. Likewise, the 8th Pay Commission is anticipated to be rolled out on January 1, 2026.