The 7th Pay Commission, which was implemented in 2016, will remain in effect till 2026. Under the 7th Pay Commission, modest salary hike of 14 percent which was lowest since 1970 was recommended. Does 7th CPC pay hike contain hints about prospective pay hikes under 8th Pay Commission? Find out.
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The 8th Pay Commission is expected to recommend a significant salary and pension hike for central government employees which can potentially range between 30 percent and 34 percent. According to a report by the financial services firm Ambit Capital, the fitment factor could be set between 1.83 and 2.46. This increase is expected to benefit over 1.2 crore beneficiaries.
The fitment factor could be set between 1.83 and 2.46. Based on back-of-the-envelope calculations, depending on the salary growth seen over different Pay Commissions, the range of fitment factors that the government could be looking at lies between 1.83 and 2.46, Ambit Capital said in a report.
Fitment factor is a multiplier used to revise the basic salary of government employees. The basic salary is multiplied by the fitment factor to determine the revised pay. Fitment factor is basically what is multiplied by the existing basic salary to calculate the new basic pay.
The 8th Pay Commission is likely to significantly increase the salaries and pensions of the central government employees by 30-34 percent, impacting around 11 million beneficiaries. The Ambit Capital report says, "The 7th Pay Commission (January 2016 - December 2025) had implemented a modest salary hike of 14% (lowest since 1970). We expect the 8th Pay Commission to announce a hike of 30-34% for salaries & pensions to cover 11mn beneficiaries to boost consumption."
Prime Minister Narendra Modi-led Union Cabinet approved the constitution of the 8th Pay Commission in January this year. The 8th Pay Commission will come into effect from January 1, 2026.
The commission panel, which will comprise a chairperson and at least two members, is expected to be formed soon. The commission will hold deliberations with various stakeholders and then submit its report on the fitment factor and other modalities for the revision of salaries and pensions of employees and retirees.
The Central Pay Commissions are normally established once every ten years to review and recommend changes to pay scales, allowances and benefits for central government employees. Implemented in 2016, the 7th Pay Commission will remain in effect till 2026. More than one crore central government employees and pensioners are looking forward to the formation of the 8th Pay Commission, which will revise their basic pay, allowances and pension.
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