Around 47 lakh employees and 65 lakh pensioners are awaiting the formation of 8th Pay recommendations.

The 8th Pay Commission salary discussions are always done around fitment factor. It’s a base for calculation of basic salary and other factors which get impacted due to this factor. There are around 1.2 crore central government employees and pensioners whose salary and pension will be changed after 8th pay commissions implementations.

Fitment factor determines the basic pay calculation and later on effect on other calculations. Employee organisations are demanding a high fitment factor of 2.86 but hike in salaries may be less than predictions.

Fitment Factor: A Closer Look

The fitment factor is a multiplier applied to the basic pay to calculate the revised salary. For example if the factor is 2.86, the minimum basic pay will increase. According to a Financial Times report, former Finance Secretary Subhash Garg noted that such a large hike may not be possible. Many experts predict the fitment factor for the 8th Pay Commission can be closer to 1.92.

Even if it goes to 2.86, the actual benefit might be very less due to inflation adjustments. We can compare it with previous pay commissions.

6th And 7th Pay Commissions

6th Pay Commission (2006): Fitment factor: 1.86

Actual salary increase: 54%

7th Pay Commission (2016): Fitment factor: 2.57

Actual salary increase: 14.2%

In the 7th Pay Commission, most of the hike went toward adjusting Dearness Allowance (DA) and a smaller portion of salary really grew.

Majority of part of the fitment factor is designed to address inflation. For example, At the time of the 7th Pay Commission, the total fitment included 2.25% current salary + 125% DA but only 0.32% was an actual increase in real salary.

Therefore only on the basis of higher numbers assuming that salary will increase is misleading. Most of the adjustments are done for inflation rather than giving ‘new money’.

The Modi government announced the formation of the 8th Pay Commission earlier this year. Terms of Reference (ToR) is also expected soon, which will outline the panel’s objectives. 40 personnel from various government departments will join the commission.

The 8th Pay Commission’s recommendations are expected to take effect in January 2026, if they consider the 7th Pay Commission’s term will end on December 31, 2025.

The 7th Pay Commission, implemented in 2016 and brought an additional burden of Rs 1.02 lakh crore on the government.