Ahead of Budget 2025, Prime Minister Narendra Modi led Union Cabinet approved the 8th Central Pay Commission for central government employees and pensioners on January 16. Once the government implements the recommendation of the new Pay Commission, the central government employees will get a much-needed salary hike. The central government has given a big-big relief to more than 1 crore central government employees and pensioners with the news. 

Notably, the then UPA government formed the 7th Pay Commission in February 2014. Furthermore, this Pay Commission submitted its report to the government in November 2015 after which the government implemented its recommendations from January 1, 2016, which increased the pay structure of central government employees and pensioners.

The 7th Pay Commission recommended the fitment factor of 2.57, thereby increasing the minimum basic salary for central government employees from Rs 7,000 to Rs 18,000. Likewise, the government also raised the minimum pension to Rs 9,000.

8th Pay Commission: What Is Fitment Factor?

The fitment factor is typically a crucial matrix that ensure that salary increases are applied uniformly across all the pay grades. This adjustment ensures that central government employees’ salaries keep up with the pace of increasing costs, protecting their buying power and helping them maintain their standard of living.

How Fitment Factor Works?

For example, the 7th Pay Commission kept the fitment factor at 2.57. Meanwhile, the minimum basic pay for the central government employees under the 6th Pay Commission was Rs 7,000. At the fitment factor of 2.57, the government determined the minimum basic salary for central government employees as: Rs 7,000 * 2.57 = Rs 17,990, rounded off to Rs 18,000.

Will It Provide A 186% Pay Hike This Time?

Recently, secretary of the National Council of Joint Consultative Machinery (NC-JCM), Shiv Gopal Mishra, said that the new pay commission will recommend a fitment factor of 2.86 or more. If the government approves this case, the minimum basic pay for the central government employees will be Rs 18,000 * 2.86 = Rs 51,480, which is a substantial 186% salary hike. Likewise, the government may also revise the pension of pensioners from Rs 9,000 to Rs 25,740.

Notably, the government is likely to implement the recommendations of the 8th Pay Commission from 2026 onwards.