8th Pay Commission: CPC formation timeline, expected salary hike and fitment factor buzz explained

The countdown has begun for the final announcement regarding the constitution of 8th Pay Commission by the Centre. The 8th Pay Commission, which was announced by the Cabinet on January 16 earlier this year, may be implemented by 2026 or 2027.

Prime Minister Narendra Modi had lauded the decision and said that it will help the central government staff to battle the scourge of high inflation. The Prime Minister had said that the 8th Pay Commission decision will not only help the employees to improve the quality of life but also aid in boosting the consumption. Hailing the staff, PM Modi had said that all government employees are the main driving force for building a ‘Viksit Bharat’.

What happened on January 16, 2025?

On this day, the Modi Cabinet gave nod to the setting up of 8th Pay Commission. While briefing the media, Union Minister Ashwini Vaishnaw had said that the term of current CPC – 7th Pay Commission – will end in 2026. The decision to establish 8th Pay Commission in 2025 has been taken so that there is enough time to conduct granular analysis of the recommendations, Vaishnaw had said. The minister had also said that stakeholders from states and other departments will also be consulted before the finalisation of terms of reference for the implantation of the 8th Pay Commission.

What is the latest on the CPC formation timeline?

The Centre has maintained that the Pay Commission will be officially set up in ‘due course of time.’ While there has been no statement by the government so far, Moneycontrol had earlier reported that the Cabinet may issue formal notification soon and the commission will start working from as early as April next month. The terms of reference are said to be approved by the Cabinet soon. This is the critical step before the CPC is formally constituted.

What will be the expected salary hike for govt employees?

A recent Goldman Sachs report says that the central government employees can expect an increase of around Rs 19,000 in their monthly salary after the 8th Pay Commission is implemented. As per the report, the median salary of the government staff is Rs 1 lakh (before tax).

What’s the buzz around fitment factor

In simple terms, fitment factor is the basis on which the salary revisions are calculated. At present, the 7th Pay Commission, that guides the salary structure of all central government staff, has the fitment factor of 2.57. Several officials have said that the 8th Pay Commission must have the fitment factor of 2.57 or above. Many reports say that the 8th Pay Commission may see the fitment factor increasing to 3. In case that happens, central government staff may see a hefty salary revision.