The formation of the 8 th Central Pay Commission by the government in January 2025 worked like a shot in the arm to the over 50 lakh central government employees and 65 lakh pensioners. This commission will re-examine the current pay scales allowances and pension norms and adjust it with the inflation and economic conditions.
What the 8th Pay Commission Covers
The 8th Pay Commission is likely to review the basic pay scales, fitment percentages and Dearness Allowance (DA) formula and a series of special allowances. It has been mandated to determine grade salaries as well as the travel allowance, residential allowance, and increment adjustments. Comparing these elements with the current indices of cost of living should help the commission to recover the actual values of incomes lost to inflation.
Fitment Factor and Projected Salary Hike
One of the key aspects in any pay commission is the fitment factor which is multiplied by existing basic pay to arrive at the new pay. The initial estimates include the 8 th Pay Commission will propose a fitment factor of 1.90 and 2.05. A 30-34 percent average pay rise based on this multiplier might be a translation of this into an increase depending on the pay level and existing allowance entitlements.
Dearness Allowance Adjustment
In addition to these basic pay updates, DA formula is also to be revised in line with the current trends of CPI-IW (Consumer Price Index for Industrial Workers). Consolidated DA of central staff is 55 percent of basic pay at present. The new commission is likely to recommend an upward adjustment which will see DA catching up with inflation so that employees do not feel the decline in purchasing power.
Implementation Timeline
After the terms of reference are agreed upon, the commission will be instated. As per the historical timelines, 18 to 24 months has been taken as the time taken to submit the reports. The stakeholders expect that the revised pay matrices may be effective w.e.f. January 1, 2026, subject to the approval of the Union Cabinet and budgetary provisions.
Projected Pay Matrix Comparison
| Pay Level | Current Basic Pay (₹) | Projected Basic Pay (₹) |
|---|---|---|
| Level 5 | 29,200 | 55,480 |
| Level 6 | 35,400 | 68,160 |
| Level 7 | 44,900 | 86,308 |
| Level 8 | 47,600 | 91,440 |
Also read: 7th Pay Commission DA Hike: Relief for 48 Lakh Employees and 66 Lakh Pensioners