News: 8th Pay Commission: Fitment factor to finalise the salary, effective 2026

Employee Relations

8th Pay Commission: Fitment factor to finalise the salary, effective 2026

Prime Minister Narendra Modi has approved the establishment of the 8th Central Pay Commission, a year before the conclusion of the 7th Pay Commission’s term.
8th Pay Commission: Fitment factor to finalise the salary, effective 2026

Prime Minister Narendra Modi has approved the setup of the 8th Central Pay Commission, ensuring its recommendations are ready before the 7th Commission's term concludes in 2026. By initiating the process a year early, the government aims to have sufficient time for comprehensive consultations with state governments and stakeholders.

“Since 1947, seven Pay Commissions have been implemented with the latest one in 2016. As the 7th Pay Commission's term concludes in 2026, initiating the process in 2025 ensures sufficient time to receive and review recommendations before completion,” reads a statement issued by the PIB.

The upcoming 8th Pay Commission is expected to propose a fitment factor of 2.6 to 2.85, potentially increasing salaries by 25-30%. This would raise the minimum basic salary above Rs40,000, further enhancing allowances and perks. Experts believe this will address inflation, rising living costs, and the disparity between public and private sector remuneration.

The 7th Pay Commission introduced a fitment factor of 2.57, leading to an average salary hike of 23.55% and aligning pensions with the ‘One Rank, One Pension’ scheme. The minimum basic pay jumped from Rs 7,000 to Rs 18,000 per month, while pensions saw a similar rise from Rs 3,500 to Rs 9,000. Before that, the 6th Pay Commission applied a factor of 1.86.

Neeti Sharma, CEO of TeamLease Digital, emphasised the broader economic benefits, noting: "Revised pay scales will enhance disposable incomes, stimulate consumption, and contribute positively to the economy."

“Such revisions are crucial to counter inflation, rising living costs, and the widening gap between public and private sector remuneration. Beyond financial benefits, the revised pay scales will also enhance disposable incomes, stimulating consumption and contributing positively to the economy. Periodic revisions reflect the government’s commitment to a fair and equitable system that values its workforce and ensures they are financially empowered,” adds Sharma.

After the 7th Pay Commission, over 1 crore employees, including more than 47 lakh central government employees and 53 lakh pensioners benefitted. The announcement of the 8th Pay Commission has come as a breather for government employees and pensioners given the rising inflation.

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Topics: Employee Relations, Business, Compensation & Benefits, #HRCommunity

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