8th Pay Commission: Panel To Be Formed By This Month; Pay Hike, DA Merger Expected

The Central Government has given its approval for the much-awaited 8th Pay Commission, but the official formation of the panel is still pending. Finance Minister Nirmala Sitharaman had stated last month that the new commission would be formed soon. For central government employees and pensioners, the biggest update is that the 8th Pay Commission could be formed by May 2025.

According to reports, once the panel is constituted, it will begin work immediately. This raises hopes for a significant increase in both salaries and pensions.

This delay has left nearly 36 lakh central government employees and pensioners waiting anxiously. Many are hopeful that the government will constitute the panel by the end of May, allowing enough time for its recommendations to be implemented before the current pay commission expires on January 1, 2026.

What Will the 8th Pay Commission Panel Look Like?

If we look at the previous pay commissions, each panel was headed by a chairman-usually a retired Supreme Court judge or a senior bureaucrat. Along with them, the team typically includes economists, and experts on government expenditure, pensions, and allowances.

The core purpose of such a team is to recommend to the government how much salaries and pensions should be increased, and how the Dearness Allowance (DA) and Fitment Factor should be determined.

What to Expect from the 8th Pay Commission

As per estimates, the 8th Pay Commission could propose a salary increase of 40% to 50% for central employees and pensioners. This would be based on a revised fitment factor, which may range between 2.28 and 2.86. If the upper limit is approved, an employee with a basic salary of ₹20,000 could see it rise to between ₹46,600 and ₹57,200.

Past Salary Hikes Show Big Jump

The history of pay commissions shows a consistent rise in salaries. During the 5th Pay Commission, the basic salary was ₹2,750. It increased to ₹7,000 under the 6th Commission and further to ₹18,000 under the 7th, marking an overall hike of about 554%.

Defence Personnel Also to Benefit

Employees and pensioners from the Defence Department will also benefit from the upcoming pay commission. With inflation and cost of living on the rise, a timely revision in salaries is crucial for lakhs of families relying on government income.

Will There Be a 186% Jump in Basic Salary?

The key factor in determining the new salary structure will be the fitment factor. In the 7th Pay Commission, this was fixed at 2.57. If the 8th Commission recommends increasing it to 2.86, basic salaries could jump by as much as 186%. However, no official confirmation has been made by the government regarding the final figures.

The salary hike will mainly depend on two factors:

DA Merger: Merging DA with the basic salary will automatically lead to an increase.

Fitment Factor: If the fitment factor is raised to 3.0, the basic salary could nearly triple.

For example, if an employee's basic salary is ₹18,000, and the fitment factor is set at 3.0, the revised basic salary could be ₹54,000. An overall increase of 25% to 40% or more is likely.