The long-awaited 8th Pay Commission is set to bring significant hikes in salaries for central government employees and pensioners. With a fitment factor likely around 1.96, the minimum basic pay could nearly double, while total pay including Dearness Allowance (DA) and House Rent Allowance (HRA) is expected to rise substantially.
Even if the full implementation of the 8th Pay Commission extends until 2027, the benefits will reportedly be effective from January 1, 2026. Over 50 lakh central government employees and around 65 lakh pensioners are expected to receive arrears once the new pay structure is introduced.
What Is The Fitment Factor?
A key component of determining salaries under the 8th Pay Commission is the fitment factor — a multiplier used to calculate a new basic salary by multiplying an employee’s current basic pay.
To understand this better:
- Under the 6th Pay Commission, the minimum basic salary was ₹7,000.
- The 7th Pay Commission applied a fitment factor of 2.57, raising the minimum basic salary to ₹18,000.
- For the 8th Pay Commission, reports suggest the fitment factor could range from 1.92 to 2.86, with 1.96 being the most likely possibility according to preliminary analyses by financial experts.
How Much Will Salaries Increase?
Assuming a fitment factor of 1.96, the minimum basic salary of ₹18,000 could rise to ₹35,280 for Level-1 employees. This amount does not include DA, but HRA will be added depending on the city of posting.
Formula to calculate new basic salary:
Old Basic Salary × 1.96 = New Basic Salary under the 8th Pay Commission
Using this formula, salary increases can be projected across all pay levels — from Level 1 to Level 18.
Example: Level-9 Employee Salary Estimation
Let’s consider a Level-9 central government employee as an example:
Current Salary (Under 7th CPC):
- Basic Salary: ₹53,100
- Dearness Allowance (58%): ₹30,798
- HRA (27% for metro cities like Delhi): ₹14,337
- Total Current Salary: ₹98,235
Proposed Salary (Under 8th CPC):
- New Basic Salary: ₹1,04,076
- DA reset to 0% (as it starts fresh post-revision)
- HRA (27%): ₹28,100.52
- Total Salary (Basic + DA + HRA): ₹1,32,177
Broader Economic Impact
Experts suggest that while the implementation of the 8th Pay Commission will increase government expenditure, it could also boost consumer spending, benefiting sectors like retail, housing, and automotive. Economists believe it could revive domestic demand, especially in urban areas where a large number of government employees reside.
Official Announcement Yet To Be Made
While expectations are high, the official notification of the 8th Pay Commission and its final formula have not yet been confirmed by the Finance Ministry. Government sources have indicated that discussions are underway, and the Commission’s framework could be announced in early 2026.
Note: These figures and projections are based on preliminary estimates, as the official formula has not yet been finalized.
