8th Pay Commission: Central government employees are awaiting the formation of the 8th Pay Commission, as it will revise their salaries significantly. The Centre announced the formation of the 8th CPC
in January. However, its terms of reference (ToR) and its members have not yet been announced. When will it be implemented?
8th Pay Commission: When Will It Be Implemented?
Usually, a pay commission is set up every 10 years. The current pay commission, the 7th CPC, was established in 2014 and was implemented on January 1, 2016, raising nearly 23% salaries for central government employees.
Similarly, its previous pay commission, the 6th CPC, was constituted in October 2006, and its recommendations became applicable from January 1, 2006. It raised salaries by about 40%.
It means it takes around two years after the constitution of a pay commission to implement the recommendations and effect the salary hikes.
As the 8th Pay Commission has not yet been constituted, reports suggest that its implementation might take place in 2028.
According to a recent report by Kotak Institutional Equities, the panel may not be implemented before late 2026 or early 2027.
In January, the Cabinet approved setting up the 8th Pay Commission to revise salaries of nearly 50 lakh central government employees and allowances of about 65 lakh pensioners. However, its ToR and members are yet to be announced.
In July this year, the finance ministry told Parliament that the central government has geared up to expedite the process of constituting the 8th CPC by taking consultations with key stakeholders including states, the Ministry of Defence, the Ministry of Home Affairs, and the Department of Personnel and Training.
8th Pay Commission: Fitment Factor Likely To Be 1.8x
The brokerage firm has said a fitment factor of 1.8x might be adopted.
The fitment factor is a multiplier used to revise the basic salary of central government employees based on recommendations by a Pay Commission; it adjusts the existing pay structure to arrive at the new pay levels.
8th Pay Commission: How Much Will Salaries Increase?
On an expected fitment factor of 1.8, the minimum pay level is likely to increase from Rs 18,000 to Rs 30,000 per month.
However, central government employees are likely to receive a nearly 13% real salary hike on average, according to Kotak Institutional Equities.
