The Central Government has initiated discussions with key ministries and departments regarding the formation of the 8th Central Pay Commission (CPC). This commission is set to revise the salary structure for approximately 50 lakh central government employees and 62 lakh pensioners. A crucial aspect of these discussions is the “fitment factor,” a key parameter that directly impacts salary increases once the new pay scale is implemented.
The fitment factor is a numerical multiplier used to calculate employees’ revised basic pay under the new pay commission, helping to standardize salary increases across various levels. In the 7th Pay Commission, the fitment factor was set at 2.57, meaning the basic pay was multiplied by this number to calculate the new salary.
Initial estimates from various media reports suggest that the 8th Pay Commission might recommend a fitment factor of up to 2.86. This could lead to a 30-34% increase in basic pay. Although the government has not yet officially confirmed the new multiplier, even a small increase is expected to improve both salaries and pensions.
If the fitment factor is set at 2.86, the minimum basic pay for central government employees could rise from the current ₹18,000 to ₹51,480, representing an almost threefold increase. This pay hike would not only affect basic pay but also other components of the salary such as Dearness Allowance (DA), House Rent Allowance (HRA), and Travel Allowance (TA), as their calculations are based on a percentage of the basic pay.
Pensioners are also expected to benefit from this increase, as the fitment factor will apply to them as well. Employee associations have been actively advocating for this increase, citing the need for a higher wage structure in the face of rising inflation and cost of living.
Although the 8th Pay Commission was approved in January 2025, its formal notification has not yet been issued. In a recent statement in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary confirmed that discussions with all stakeholders are ongoing. The appointment of the commission’s chairman and members will take place only after the notification is released. Once formed, the commission will submit its recommendations to the government, which will then be reviewed and approved. Based on the typical timeline followed by previous commissions, the new pay structure is likely to come into effect from January 2027.
The 8th Pay Commission is expected to bring significant salary increases for central government employees and pensioners. The determination of the fitment factor will play a crucial role in deciding the extent of this increase. The government’s final decision will have a major impact on the financial future of all central government employees and pensioners.
