The 8th Pay Commission, set up on January 16, 2025, following the Union Cabinet’s approval, shall accordingly adjust salaries and pensions for over 48.62 lakh Central Government employees and 67.85 lakh pensioners, with an implementation date on January 1, 2026. The commission shall balance compensation against inflation and upward movement of the general prices, but the recent projections indicate an infinitesimally fitment factor, thus troubling the aspirations of many who perhaps expected huge pay hikes.
Fitment Factor and Salary Increase
This fitment factor is a multiplying factor applied to the revised basic pay; its value is proposed to stand at 1.8. This value was 2.57 in the 7th Pay Commission, and the workers’ demands had it at 3.68. This would mean that the salary increases are envisaged at a mere 35%. For instance, an employee drawing a basic pay of ₹18,000 can foresee his basic pay to go up to ₹32,400 on implementation of the fitment factor; and likewise for employees drawing a pay of ₹50,000, their basic pay would increase to around ₹90,000. But the end of the last DA, which was 55%, will start anew at zero, counteracting the salary gain.
Impact on Employees and Pensioners
This slight increase should disappoint the employees, especially those who are classified Grade C, numbering 90% of the workforce. Pensioners would have their pensions increased in proportion, which implies that minimum pension may rise from ₹9,000 to ₹16,200. These allowances, depending on HRA and TA, would be fixed considering the basic pay after the revision and without any arrears for past periods, being depreciating factors for financial planning. On account of keeping an eye on fiscal consolidation, the government is being very cautious.
Implementation Timeline and Challenges
The formation of the commission is still in progress, with the last date for submission of names of committee members being extended to June 30, 2025. Recommendations are to be made within 18 months; therefore, the implementation date should be set to January 2026. The delay in finalizing the panel has raised eyebrows as these consultations are crucial, including discussions with employee unions. Meanwhile, the government is trying to implement 1.8 fitment factor as an interim measure, from which some adjustments can be made before the final report is made.
Also Read:8th Pay Panel May Set Fitment Factor At 1.8: Salary Hike Hopes Fade For Govt Staff