Indian government has officially sanctioned the 8th Pay Commission, which is set to revise salaries and pensions for over one crore central government employees and retirees.
The changes will take effect from January 1, 2026, bringing significant updates to basic pay, allowances, and retirement benefits.
One of the key aspects under review is the fitment factor, which determines salary revisions.
In the 7th Pay Commission, this factor was 2.57, and reports suggest it may increase to 2.86 under the 8th Pay Commission.
If implemented, the minimum basic salary could rise from ₹18,000 to ₹51,480, while the minimum pension may increase from ₹9,000 to ₹25,740.
8th Pay Commission: Expected Changes in Basic Pay and Allowances
The government will implement major updates to compensate government employees under the 8th Pay Commission:
Some of the anticipated changes include:
- Basic Pay Revision: The government will adjust salaries across different pay grades based on the revised fitment factor.
- House Rent Allowance (HRA): Employees posted in metropolitan cities such as Delhi, Mumbai, and Bengaluru may receive higher HRA slabs compared to those in smaller towns.
- Travel Allowance (TA): The government will adjust travel allowances based on job-specific requirements, ensuring fair compensation for employees who frequently travel for work.
- National Pension System (NPS): Currently, central government employees contribute 10% of their basic pay and Dearness Allowance (DA) to the NPS, with the government contributing 14%. These contributions will increase in line with revised salaries.
- Central Government Health Scheme (CGHS): An increase in basic pay will directly raise CGHS charges, as subscription rates are linked to salary slabs.
Estimated Salary Hikes Across Different Pay Grades
Experts have calculated estimated salary revisions for various government pay levels, based on a proposed fitment factor of 2.86:
| Pay Grade | Current Basic Pay | Expected Basic Pay (8th CPC) | Estimated Gross Salary | Projected Take-Home Pay |
|---|---|---|---|---|
| Level 3 (Grade 2000) | ₹18,000 | ₹57,456 | ₹74,845 | ₹68,849 |
| Level 6 (Grade 4200) | ₹35,400 | ₹93,708 | ₹1,19,798 | ₹1,09,977 |
| Level 9 (Grade 5400) | ₹56,100 | ₹1,40,220 | ₹1,81,073 | ₹1,66,401 |
| Level 11 (Grade 6600) | ₹78,800 | ₹1,84,452 | ₹2,35,920 | ₹2,16,825 |
These figures are early estimates and may vary based on the final recommendations of the 8th Pay Commission.
Implementation Timeline and Government Strategy
The government will form the official panel for the 8th Pay Commission within the next two months.
The committee has a report submission deadline set for late 2025, marking a crucial step in the salary revision process.
The Union Cabinet will then review the recommendations before final approval.
Political analysts predict that the government may fast-track the Pay Commission’s implementation to align with the 2026 Union Budget and upcoming general elections.
Financial experts warn that the government must balance salary hikes with fiscal prudence to prevent economic strain.
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