The central government has taken a key step by announcing the 8th Pay Commission. However, the official formation of the panel, including the appointment of its chairman and members, is still pending. Meanwhile, nearly 50 lakh central government employees and 65 lakh pensioners are waiting eagerly for the Terms of Reference (ToR) to be finalised. The biggest concern among employees remains the fitment factor, which directly decides the increase in salaries and pensions.
Let’s understand what changes employees might see once the 8th Pay Commission gets fully activated and how the fitment factor will impact pay hikes.
What Is the Fitment Factor and Why It Matters for Salary Hike
The fitment factor is a multiplying figure used to calculate the new salary from the existing basic salary. It played a major role in the 7th Pay Commission, where the fitment factor of 2.57 helped raise the minimum basic salary from ₹7,000 to ₹18,000.
Now with the 8th Pay Commission coming, there are high hopes that the fitment factor will go up again. Employee unions have discussed various figures—some demanding a factor between 2.57 to 2.86. However, economic experts believe such numbers may not be accepted.
According to former Finance Secretary Subhash Garg, a more realistic estimate of the new fitment factor could be around 1.92. Even this modest hike will still bring good news for employees, especially those at Level 1 of the government pay matrix.
Expected Minimum Salary Increase Based on Fitment Factor
Let’s assume a Level 1 central government employee currently earns a basic salary of ₹18,000. With a fitment factor of 1.92, the revised salary would be:
₹18,000 × 1.92 = ₹34,560
So, the basic pay could jump by ₹16,560. Though not final, this estimate gives an idea of how the 8th Pay Commission might improve earnings even with a conservative fitment factor.
If the government considers a fitment factor of 2.0, then the salary could rise to:
₹18,000 × 2.0 = ₹36,000
This fits well with union demands for a minimum wage of ₹36,000 under the 8th Pay Commission.
Family Size to Play a Role in Salary Calculations
Another important change the National Council – Joint Consultative Machinery (NC-JCM) has suggested is updating the family unit size from 3 to 5 while calculating the minimum wage. The current system follows a model from the 15th Indian Labour Conference, where family units are defined as:
- Husband: 1 unit
- Wife: 0.8 unit
- Two children: 0.6 unit
- Total: 2.4 units (rounded off to 3 units)
However, the employee side of NC-JCM argues that today’s families often include senior citizens, especially parents who are legally and morally dependent under the Maintenance and Welfare of Parents and Senior Citizens Act, 2022.
They demand this updated model for salary calculation:
- Husband
- Wife
- Two children
- One elderly parent
- Total: 5 units
This change can increase the minimum salary slab as it will be calculated based on the needs of five family members instead of three.
Proposal to Merge Lower Pay Levels for Better Salary Stability
Another major issue raised by employee representatives is the merging of lower pay levels. Under the current Pay Matrix system, salaries range from Level 1 to Level 18, with Level 1 being the lowest (for peons, MTS, clerks) and Level 18 for top officials like Cabinet Secretaries.
The unions have demanded the following merges to solve salary structure problems:
- Level 1 merged with Level 2
- Level 3 merged with Level 4
- Level 5 merged with Level 6
These changes aim to provide better salary stability and remove inconsistencies that indirectly affect Modified Assured Career Progression (MACP) benefits.
Demand to Add 50% Dearness Allowance into Basic Salary
The employee side has also renewed their old demand to merge 50% of the current dearness allowance (DA) into the basic salary. Presently, DA stands at 55% after a 2% hike in March 2025. Merging a portion of DA into the basic pay will not only increase monthly salary but will also boost pension and other benefits linked with the basic pay.
When Will the 8th Pay Commission Become Fully Active?
The 8th Pay Commission will officially start its work only after the government finalises and notifies the Terms of Reference (ToR). Once this is done, the commission will begin discussions and data collection to decide how salaries and pensions should be revised.
Historically, a Pay Commission is set up once every 10 years. The 7th Pay Commission, which brought big changes like the Pay Matrix system, was implemented in 2016. It had an estimated impact of ₹1.02 lakh crore on the government’s finances in FY 2017.
The new commission is expected to bring a similar or larger impact depending on the fitment factor, minimum wage calculation, and other structural revisions.
Disclaimer:
Salary projections mentioned above are based on expected values and expert opinions. Final revisions will depend on the official recommendations of the 8th Pay Commission and government approval.
Source: NDTV Profit, NC-JCM
