Union Cabinet led by Prime Minister Narendra Modi approved the formation of 8th Central Pay Commission for central government employees and pensioners on January 16 just days before the Budget 2025. After the government implements the recommendation of the new Pay Commission, the central government employees will get a much-willing pay hike. The central government gave a big relief to more than 1 crore central government employees and pensioners with this news.
The then UPA government formed the 7th Pay Commission in February 2014 following which, this Pay Commission submitted its report to the government in November 2015. Furthermore, the government implemented its recommendations from January 1, 2016, which increased the pay of central government employees and pensioners.
It is worth noting that the 7th Pay Commission suggested the fitment factor of 2.57, which increased the minimum basic pay for central government employees from Rs 7,000 to Rs 18,000. Likewise, the government also rocketed the minimum pension to Rs 9,000.
8th Pay Commission: Will DA Reset To 0?
After the 8th Pay Commission submits its recommendations, two key factors will play a vital role: the fitment factor, which determines the salary increase, and the DA (Dearness Allowance) factor. The government is likely to merge DA factor with employees’ basic pay. If the government implements the recommendations before January 2026, the DA will be reset to zero, effectively restarting the DA calculation from scratch.
186% Pay Hike & Timeline
Recently, secretary of the National Council of Joint Consultative Machinery (NC-JCM), Shiv Gopal Mishra said that the new Pay Commission may consider a fitment factor of “at least 2.86”. This may lead to a significant 186% pay hike for the central government employees. If the government approves this fitment factor, the minimum basic salary would increase from Rs 18,000 to Rs 51,480. Furthermore, pensioners’ pensions could rise from Rs 9,000 to Rs 25,740.
Union Minister Ashwini Vaishnav has recently said during the announcement of the 8th Pay Commission that the government may implement the recommendations of the new pay commission from 2026. “Ahead of that, the government has approved the constitution of the 8th Pay Commission so that recommendations are made in a timely manner and can be implemented from 2026 onwards,” said Vaishnav.
