8th Pay Commission: Basic salary may go up to Rs 40,000-Rs 50,000 from Rs 18,000 under 7th pay panel

The Centre has given its approval for the establishment of the 8th Pay Commission under which the salaries of approximately 50 lakh Central government employees will be revised. The announcement was made by Union Minister Ashwini Vaishnaw on Thursday. The implementation of the 8th Pay Commission is expected to result in salary increases for Central government employees and a revision of the Dearness Allowance (DA). 

According to experts, it is expected that the minimum basic salary for central government employees will increase to over Rs 40,000 per month, in addition to benefits, allowances, and performance-based pay. 

“For the 8th Pay Commission, a fitment factor between 2.6 and 2.85 is speculated, potentially increasing salaries by 25-30 per cent and pensions proportionately. The basic minimum is expected to rise beyond Rs 40,000, along with perks, allowances and performance pay," said Neeti Sharma, CEO of TeamLease Digital.

"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," Sharma added.

The salary increase as per the pay commission is determined based on fitment factors. Reports suggest that the fitment factor, a crucial multiplier used in determining salaries and pensions for government employees, may be raised from 2.57 to 2.86. If this adjustment is made, the minimum basic pay could potentially increase from Rs 18,000 to Rs 40,000 or even up to Rs 51,480.

Please note the current figures provided are estimates, and the final salary hike details will be officially confirmed when the Commission submits its report later this year.

As per the information available, employees currently receive a minimum basic salary of Rs 18,000 per month under the 7th Pay Commission, excluding perks, allowances, and performance pay. This amount has been increased from Rs 7,000 under the 6th Pay Commission.

Taking into account various allowances such as DA, HRA, TA, and others, the current minimum salary may potentially reach Rs 36,020 per month under the 7th CPC.

Five things to note

The Union Cabinet has given its approval for the establishment of the 8th Pay Commission as the 7th Pay commission will end on December 2025. 

The chairman and two members of the 8th Pay Commission will be appointed in the near future, and they will commence consultations with various stakeholders, including central and state governments.

The government is confident that the recommendations put forth by the 8th Pay Commission will be presented well ahead of the completion of the 7th Pay Commission's term in 2026.

Prime Minister Modi has highlighted the potential positive outcomes of the decisions made by the 8th Pay Commission. He believes that these decisions will not only enhance the quality of life for government employees and retirees but also contribute to an increase in consumption within the economy.

The historical importance of pay commissions in India can be seen through the seven commissions that have been established since the country's independence in 1947.