8th Pay Commission Update: Good news is coming for crores of central employees and pensioners waiting for the implementation of the 8th Pay Commission. In fact, according to a recent report by a brokerage firm, Ambit Capital, central government employees and pensioners can expect an increase of up to 34% in their salary under the 8th Pay Commission (8th Pay Commission Salary Hike).

44 lakh central employees and 68 lakh pensioners will benefit
This report also states that after the implementation of the recommendations of the commission, it will not only increase the income of government employees and pensioners, but it is also expected to boost economic activities across the country. The recommendations of the commission will directly benefit about 44 lakh central employees and 68 lakh pensioners of various ministries and departments.

Ambit Capital's report said: "The 7th Pay Commission (January 2016 - December 2025) implemented a meagre 14% pay hike (the lowest since 1970). We expect the 8th Pay Commission to announce a 30-34% hike in salary and pension to benefit 1.1 crore beneficiaries and boost consumption."

What will be the fitment factor in the 8th Pay Commission?

The 'fitment factor' plays an important role in determining the hike in government salaries. The revised basic salary for any pay commission is calculated by multiplying the existing basic salary by the fitment factor (8th pay commission Fitment Factor).

The fitment factor of every pay commission is different. To explain as an example, the Seventh Pay Commission had recommended the implementation of a fitment factor of 2.57, which increased the minimum basic salary of central government employees from Rs 7,000 to Rs 18,000 per month. However, after adjusting the dearness allowance (DA - dearness allowance), the actual increase was only 14.3%.

According to the report of Ambit Capital, the fitment factor in the Eighth Pay Commission can be between 1.83 and 2.46. That is, the new salary will be decided by increasing the existing basic salary of the employees according to this multiplier.

When will the recommendations of the new pay commission be implemented?

The recommendations of the 8th Pay Commission are to be implemented from January 2026. However, it can be implemented only when the report is ready, sent to the government, and its recommendations are approved; in view of this, it is unlikely to be implemented from January 2026. Because the Terms of Reference (ToR), the chairman and members have not been appointed yet.

Ambit's report also states that it took 18-24 months for the 7th Pay Commission to be implemented. Therefore, if the process is delayed further, it may take till the financial year 2027 for the recommendations of this commission to be implemented.

Basic salary and dearness allowance will also increase.

According to Ambit's report, the basic salary and dearness allowance (DA) of pensioners will also increase. However, they are not eligible for HRA or other allowances, so they will get slightly less benefit on a percentage basis.

How much burden will the 8th Pay Commission put on the government?

Ambit Capital estimates that this increase of 30-34% in salary and pension will put an additional burden of Rs 1.3 to 1.8 lakh crore on the government. Its direct impact can be seen on GDP up to 30-50 basis points. This report estimates that due to an increase in the income of central employees and pensioners, shopping will increase in the country. This will greatly benefit the FMCG, BFSI, retail, and automobile sectors.

Central employees and pensioners will get relief from the government's decision.

A new pay commission is formed every 10 years to maintain the salary of government employees according to the private sector and to retain talented employees in government service. Now everyone's eyes are on the next official announcement of the central government and the outline of the commission. If the process accelerates, then more than one crore central employees and pensioners can get big relief in the form of increased income.

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