8th Pay Commission : The central government has finally announced the formation of the 8th Pay Commission. Its direct benefits will accrue to millions of central government employees and pensioners across the country. The Pay Commission, formed every 10 years, brings significant changes to employees’ salaries and pensions.
Until now, all central government employees and pensioners received salaries and pensions based on the recommendations of the 7th Pay Commission, which was implemented on January 1, 2016. The 8th Pay Commission will now submit its recommendations, and these recommendations are slated to be implemented from January 1, 2026. However, it is expected that with the salary increases under the 8th Pay Commission, the minimum basic pension may also increase from Rs 9,000 to Rs 25,000 per month.
How much will pensions and salaries increase?
The most important aspect of the 8th Pay Commission is the fitment factor. This is a multiplier based on which salary and pension increases are determined. If the current pension is Rs 30,000 and the fitment factor is set at 2.5, the new pension could reach Rs 75,000. Similarly, the minimum pension, currently Rs 9,000, could rise to Rs 22,500 to Rs 25,000. It is estimated that this time, salaries and pensions could see an average increase of 25-30%.
Not only this, along with the salary increase, dearness allowance (DA) and other allowances will also increase. Currently, DA has reached 50% under the 7th Pay Commission, which has necessitated a revision in the pay structure. With the introduction of the new Pay Commission, dearness allowance will also be calculated based on the new basic salary, making any future DA increase more effective.
How will pensioners benefit?
The biggest concern of pensioners is that their pension should not decrease with time due to inflation. In every new Pay Commission, a new system is made regarding pension so that there is no difference between old pensioners and new retiring employees. For example, in the 7th Pay Commission, the pension of pensioners was calculated by fitting them in the pay matrix. Under this, the pension was decided on the basis of grade pay and pay-band at the time of retirement. Similarly, in the 8th Pay Commission also, the pension of old pensioners will be decided by a new formula.
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