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With rising rents, fuel, school fees and medical costs, government employees are expecting a significant salary hike under the 8th Pay Commission.
The 8th Pay Commission is expected to fix a fitment factor between 2.28 and 2.86.
The 8th Pay Commission, officially announced in January 2024, is expected to be set up soon to revise salaries, pensions, and allowances for central government employees and retirees. While the 8th Pay Commission would bring relief and hope to over 1 crore employees and pensioners, a more pressing question is surfacing among many: Will the currently expected fitment factor of 2.86x be able to keep up with the rising cost of living in the country?
What Past Pay Commissions Show Us
Historically, pay commissions have revised salaries about every 10 years. The 6th Pay Commission (2006) and the 7th Pay Commission (2016) brought significant increases in basic pay and allowances. The minimum basic salary of central government employees was increased from Rs 2,750 to 7,000 under the 6th CPC, and from 7,000 to Rs 18,000 under 7th CPC.
What’s Driving Costs Up Today?
India’s economic landscape has changed drastically in the past 8 years. As per various reports, here’s medium- to long-term inflation:
Housing: In cities like Delhi, Jaipur, Bhopal and Lucknow, rents have gone up by 40-60% since 2016.
Education: Average school fees in private schools have increased by over 80% in the last 10 years.
Fuel & Transport: Petrol has gone from around Rs 65 to over Rs 100 per litre in various cities.
Medical Expenses: Out-of-pocket medical costs have soared. Many now spend Rs 3,000-Rs 10,000/month even with CGHS coverage.
Food Inflation: Household groceries have become significantly costlier, especially essentials like wheat, rice, cooking oil, and vegetables.
How Much Are Salaries Expected To Rise Under 8th Pay Commission?
According to reports, the 8th Pay Commission is expected to fix a fitment factor between 2.28 and 2.86. While the 8th Pay Commission has not yet released its official formula, based on past patterns and early discussions, salaries could see a fitment factor increase of up to 2.86.
If the 8th Pay Commission recommends a fitment factor of 2.86, it could lead to a significant salary hike for central government employees. For example:
If current basic pay = Rs 20,000
Then new basic pay = Rs 20,000 × 2.86 = Rs 57,200
This 186 per cent hike reflects a remarkable jump in take-home salary, especially compared to the hike seen during the previous pay commission.
An economist, who did not want to be named, said the challenge for the 8th CPC is not just to revise pay, but to future-proof it against rapid urban inflation.
A mid-level government employee from Chandigarh who didn’t wish to be named, said, “Most of our salary hike will go toward covering rent and school fees.”
When Will 8th Pay Commission Be Set Up?
While the government has not yet made an official announcement, expectations are high that the fitment factor, revised pay matrix, allowances, and pension structures will be finalised in 2025. Employees are particularly keen to learn whether the 8th CPC will propose a uniform fitment factor across all levels, which could simplify salary structures and enhance fairness.
As per key stakeholders, the terms of reference for the 8th Pay Commission are likely to be approved soon by the central government.
“We expect the Terms of Reference to get the government’s nod soon. It should be approved at the earliest,” Shiv Gopal Mishra, secretary, staff side of the National Council-Joint Consultative Machinery, told NDTV Profit.
Until official announcements are made, government employees remain in anticipation, hoping that the 8th Pay Commission brings substantial financial relief in line with rising costs of living and inflation.
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