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The Union Cabinet, led by Prime Minister Narendra Modi, approved the formation of the 8th Pay Commission on January 16, 2025. The move, which came days ahead of the Delhi Assembly elections, promises to increase the earnings of public sector workers.
On X (formerly Twitter), Prime Minister Modi shared the government's support for its workforce, writing, “We are all proud of the efforts of all Government employees, who work to build a Viksit Bharat. The Cabinet's decision on the 8th Pay Commission will improve quality of life and give a boost to consumption.”
We are all proud of the efforts of all Government employees, who work to build a Viksit Bharat. The Cabinet's decision on the 8th Pay Commission will improve quality of life and give a boost to consumption. https://t.co/4DCa5skxNG
— Narendra Modi (@narendramodi) January 16, 2025
The announcement comes months after the dearness allowance (DA) for central government employees crossed 50% of their basic salary. Starting July 1, 2024, both central government employees and pensioners began receiving 53% of their basic pay as DA/relief, with the next revision set for January 2025.
What central government employees expect from the 8th Pay Commission
The salary structure currently in place follows the recommendations made by the 7th Pay Commission, which came into effect on January 1, 2016. With the formation of the 8th Pay Commission, the structure is set for revision.
While the exact percentage of salary hike has not been disclosed, reports suggest that the fitment factor — the key multiplier used to determine salaries and pensions — could see a rise from 2.57 to 2.86. If this occurs, the minimum basic salary for government employees could increase significantly, rising from Rs 18,000 to Rs 51,480.
Understanding fitment factor
The fitment factor is an important element used in calculating the revised salary and pension amounts for central government employees. It serves as a multiplication coefficient, which adjusts the pay scale in accordance with the new commission's recommendations.
Under the 7th Pay Commission, the fitment factor was 2.57, which led to an increase in the minimum basic salary of central government employees from Rs 7,000 under the 6th Pay Commission to Rs 18,000. The basic salary excludes perks, allowances, and performance pay. When dearness allowance (DA), house rent allowance (HRA), transport allowance (TA), and other benefits are factored in, the total minimum salary went up to Rs 36,020 per month under the 7th Pay Commission.
Now, depending on the final directives from the 8th Pay Commission, various allowances may undergo changes. This revision is expected to substantially increase the remuneration of central government employees.