8th Pay Commission Approved: Salary and Pension Hike for Government Employees

8th Pay Commission Approved: The Central Government has approved the formation of the 8th Pay Commission, paving the way for an increase in salaries and pensions for government employees and pensioners. This decision is set to benefit over 49 lakh central government employees and approximately 65 lakh pensioners across the country.

8th Pay Commission Formation Approved

Union Minister for Information and Broadcasting Ashwini Vaishnaw announced that the Union Cabinet, led by Prime Minister Narendra Modi, has decided to form the 8th Pay Commission. The commission will provide recommendations on salary hikes and pension revisions for government employees.

The last pay commission, 7th Pay Commission, was implemented in 2016 and remains in effect until 2026. The 8th Pay Commission is expected to come into effect from January 1, 2026. The government has also shared plans to appoint a chairperson and two members for the commission shortly.

Salary Hike and Fitmehnt Factor

Reports suggest a possible increase in the fitment factor from the current 2.57x to 2.86x, resulting in significant hikes in basic salaries. For instance, if the fitment factor increases, the current minimum basic salary of ₹18,000 could rise to ₹51,480. This adjustment is expected to provide considerable financial relief to employees.

What is Fitment Factor?

The fitment factor plays a crucial role in revising salaries as it determines the increase in basic pay. It multiplies the existing basic salary to calculate the revised amount.

8th Pay Commission: Impact on Government Finances

The approval of the 8th Pay Commission is likely to increase the financial burden on both central and state governments. Currently, salaries and pensions account for a significant portion of government expenditures. In 2024, the total spending on salaries and pensions by both central and state governments reached ₹9.6 lakh crore, which constitutes 3.3% of India’s GDP.

Challenges for State Governments

While the central government aims to implement the new pay scale by 2026, several states are still struggling to fully adopt the 7th Pay Commission recommendations. The 8th Pay Commission's recommendations may put additional pressure on state finances, leading to concerns about their fiscal health.

Key Features of the 7th Pay Commission

Implementation Year: 2016
Minimum Salary: ₹18,000 per month
Maximum Salary: ₹2.5 lakh per month (for Cabinet Secretary)
Fitment Factor: 2.57x
Gratuity Limit: ₹20 lakh
Minimum Pension: ₹9,000 per month

When Will the 8th Pay Commission Be Implemented?

The government plans to form the 8th Pay Commission in 2025, ensuring its recommendations are ready before the current 7th Pay Commission period ends. The new recommendations will take effect from January 1, 2026.