Modi government approves 8th Pay Commission ToR; Check how much salaries hike can be expected for central govt employees

Check out the expected salary hike with the implementation of 8th Pay Commission.

8th Pay Commission salary hike update: In a massive update for the central government employees, the Union Cabinet approved the Terms of Reference (ToR) for the 8th Central Pay Commission. Paving the way for a fresh revision of salaries, pensions, and allowances for central government employees, the 8th Pay Commission is expected to be a big relief for the central government employees. Notably, expected to be constituted by April 2025, the recommendations of the 8th Pay Commission likely to be implemented between 2026 and 2027.

The commission will examine and recommend changes in salaries and other benefits of central government employees. The commission’s recommendations will cover nearly 50 lakh central government employees, including defence services personnel, and 69 lakh pensioners.

As per a report by PTI news agency, the ToR of the commission was approved by the Cabinet about nine months after it gave an in-principle nod to setting up the 8th Pay Commission. Notably, the government has said that the ToR has been finalised after consultation with various ministries, state governments and staff side of joint consultative machinery.

8th Pay Commission: How much salaries hike can be expected?

According to projections reported by various media outlets quoting experts, the salaries of central government employees could see a rise by up to Rs 19,000 per month based on a potential fitment factor of 2.86.

For a mid-level government employee currently earning Rs 1 lakh per month, the salary increases would depend on the budgetary allocation.

Expected salary on Rs 1 lakh salary

For an example, if there is a ₹1.75 lakh crore allocation, the monthly pay could rise from Rs 1 lakh to Rs 1.14 lakh.  Similarly, a Rs 2 lakh crore allocation could raise it to Rs 1.16 lakh, while a Rs 2.25 lakh crore allocation might increase the salary hike to Rs 1.18 lakh.

What is the role of fitment factor in expected salary?

The fitment factor is a very important factor for the Pay Commission as it determines by how much amount the existing salaries and pensions will be multiplied under a new pay structure. For a reference, the 7th Pay Commission, which was implemented in 2016, used a 2.57 fitment factor, resulting in a 157% hike and raising the minimum basic pay from Rs 7,000 to ₹18,000.