The 8th Central Pay Commission (CPC), having achieved sanction by the Union Cabinet on January 16, 2025, has been widely referred to as the spawning fountain that has generated hope for over 50 lakh central government employees and 65 lakh pensioners throughout India. Having been assigned the revision of salaries, allowances, and pensions, its implementation is expected from January 1, 2026, ending the life of the 7th CPC in December 2025. With inflation affecting the daily expenditure, the employees want a big hike in salaries so as to lessen their financial burdens. This article delves into changes that may occur, the fitment factor, and its implications.
Projected Salary and Pension Increases
The 8th CPC is anticipated to grant a salary increase of 20–35% with a fitment factor of about 1.83 to 2.86 vis-a-vis the 7th CPC-recorded 2.57. For a basic pay of ₹18,000, the revised pay may rise to the tune of ₹32,940–₹51,480, and for a basic pay of ₹50,000, to ₹91,500–₹1,43,000. In due consideration to the fact that the DA as on July 2025 stands at 59%, it shall be reset to nil, thereby reducing the effective hike to anywhere around 13–14%. Pensioners will, however, see their minimum pension being hiked from ₹9,000 to ₹20,500–₹25,740 that will improve the retirees’ financial position.
New Pay Matrix and Allowances
With the 8th CPC coming into effect, a new pay matrix will also come into effect, thereby doing away with the 24-level structure proposed by the 7th CPC and streamlining salary calculation methods across respective roles. Consequently, allowances such as House Rent Allowance (HRA), Transport Allowance (TA), etc., will also get recalculated as per the new concept of basic pay, with HRA expected to be raised to 30% in metros. Allowances are expected to continue to be revised twice a year against inflation so that salaries are equated with the conditions of the economy. Proposals to merge the extremely lower pay scales (Level 1 with Level 2), to name one, have been put forth to reduce lay disparities.
Fitment Factor Debate
The more important issue under discourse is that of the so-called fitment factor (whereby basic pay is multiplied by the factor to revise it). Some reports say that the factor would be a low 1.8, leading to a minimum basic pay of ₹32,000, while other estimates go up to 2.86, leading to a figure of ₹51,480. The employee unions, including the National Council-JCM, have demanded a factor of 2.57 in respect of the minimum pay based on the 7th CPC on the grounds of fairness. It is the fitment factor which will again govern the issue of effective increase in salary once the DA is reset.
Also Read: Disappointing 8th Pay Panel Report: Govt Staff May Get Just 13% Hike