8th Pay Commission: How much salary hike can Central govt employees expect?

Union minister Ashwini Vaishnaw on January 16 had announced the set up of the 8th Pay Commission after receiving Prime Minister Narendra Modi-led Union Cabinet’s approval.

Ever since the Central government announced the formation of the 8th Pay Commission, which is scheduled to submit its report by year-end, there has been numerous speculations about how much salary hike Central government employees will get.

However, former finance secretary Subhash Chandra Garg has reasoned that the most possible pay hike could see the minimum salary of a government employee double to a range between Rs 34,560 and Rs 37,440 per month from the current Rs 18,000, according to News24.

Earlier, it was reported that Shiv Gopal Mishra, the secretary of the National Council of Joint Consultative Machinery (NC-JCM), claimed that the Pay Commission would recommend a fitment factor of 2.86, which would mean an increment of a whopping 186 percent.

Garg dismissed the suggestion as ‘impossible’ and said it is akin to asking for the moon.

“NC-JCM (National Council of Joint Consultative Machinery) can ask for the moon. Fitment factor of 2.86 per cent is asking for the moon, which is impossible to get," Garg told News24 during an interview.

How the fitment factor is calculated?

The fitment factor is used to determine the new basic salary structure of current government employees and the pensioners. The factor is calculated by the Pay Commission and multiplied with the current basic pay to arrive at the revised basic salary.

Garg explained that Commission will calculate the fitment factor by considering the basic pay and the dearness allowance as of January 1, 2026. As of now the dearness allowance stands at 53 percent. However, two more installments will be added before January 1, 2026, when the DA could reach 60 percent.

He told the news channel that the starting factor is 1.6 and the next step is to find out the quantum of salary hike. Garg said generally the Commissions have recommended a jump of between 15 percent and 30 percent, adding that the 7th Pay Commission gave an increment of 14 to 15 percent.

The former finance secretary explained that considering a hike of 10 to 30 percent, the fitment factor is likely to be between 1.92 and 2.08.

The 7th Pay Commission had recommended a fitment factor of 2.57, following which the minimum basic pay rose from Rs 7,000 to Rs 18,000.

8th Pay Commission

Union minister Ashwini Vaishnaw on January 16 had announced the set up of the 8th Pay Commission after receiving Prime Minister Narendra Modi-led Union Cabinet’s approval.

The tenure of the Seventh Pay Commission ends in 2026. "As the 7th Pay Commission's term concludes in 2026, initiating the process in 2025 ensures sufficient time to receive and review recommendations before its completion," Vaishnaw had said.

The pay commissions are, notably, set up once in 10 years to recommend the government on changing the pay structure and scale of its employees.

Previous pay commissions

The 7th Pay Commission, which emphasized work-life balance, increased the minimum salary to Rs 18,000 from Rs 7,000 while the maximum salary was capped at Rs 2,50,000 per month.

The 6th Pay Commission, formed in 2006, made Rs 7,000 the minimum government salary and Rs 80,000 was the maximum a government employee could draw every month.

The 5th Pay Commission was formed in April 1994 and it recommended a minimum payment of Rs 2,550 and Rs 26,000 per month was made the maximum salary.

In the 4th Pay Commission, set up in September 1983, the recommended minimum salary was Rs 750 per month and a maximum salary of Rs 8,000 per month.

The 3rd Pay Commission was constituted in April 1970 and had a minimum salary of Rs 185 per month, while the maximum was capped at Rs 3,500 per month. In the 2nd Pay Commission set up in 1957, the minimum recommended pay was Rs 80 per month and Rs 3,000 was the maximum.

In the first pay commission set up in 1946, the Rs 55 per month was the minimum salary per month and Rs 2,000 was the maximum monthly pay. There were around 1.5 million beneficiaries in the country first decade of independence and the commission had put focus on the concept of living wage.