8th Pay Commission: The Central Government on Thursday announced the formation of the Eighth Pay Commission for its employees before Budget 2025. The Narendra Modi-led government has approved the formation of a pay commission for the first time. About 50 lakh central employees and 65 lakh pensioners will benefit from this decision of the government. Earlier in 2016, the government had implemented the recommendations of the Seventh Pay Commission, due to which there was a big increase in the salaries of the employees.
When will the recommendations of the Eighth Pay Commission be implemented?
The tenure of the Seventh Pay Commission is till 31 December 2025. In such a situation, the recommendations of the new pay commission can be implemented in 2026. If the recommendations of the new Pay Commission are implemented, speculations have started about how much the minimum basic salary of central employees will increase. All kinds of claims are being made on social media. What is the truth of these claims? How much did the salaries of employees increase after the recommendations of the Seventh Pay Commission? If the recommendations of the new commission are decided on the basis of earlier data, then how much impact will there be on the salaries of the employees, let us know in detail.
Approximately how much time does it take from the formation of the Pay Commission to the implementation of the recommendations?
First of all, let us talk about the claims being made on social media after the formation of the Eighth Pay Commission. The speculations currently being made on the internet regarding increase in salaries of employees are merely speculations. Now the Cabinet has given approval for the formation of Pay Commission. Now the Pay Commission will be formed by naming its members and chairman. The commission will give its recommendations to the government after deliberating on the entire issue. Then only when the government implements those recommendations, the increase in the salary of the employees will be confirmed. Based on past experiences, the entire process may take at least one to two and a half years. Even if agility is shown at the government level and the entire process is completed within a year, the recommendations of the new commission will be implemented only in 2026. Therefore, it is useless to rely on any salary calculation from now on.
What happened after the recommendations of the Seventh Pay Commission, what can we guess now?
Now let us know what was the change in the salary of central employees after the implementation of the recommendations of the Seventh Pay Commission? Also, if the recommendations of the new Pay Commission remain close to the old recommendations, then we can also know how much will be the change in the salary of the employees. But before knowing all this, we have to know about an important term, which is ‘Fitment Factor’.
What is fitment factor?
Fitment factor is a multiplier used in calculating the revised pay and pension for government employees. This fitment factor is the basis of the Pay Commission’s recommendations, from which the increased salary of employees and increased pension of pensioners are calculated. Based on the recommendation of the Seventh Pay Commission, the government had implemented a fitment factor of 2.57 for determining the salaries of central employees in the year 2016. In contrast, the fitment factor in the Sixth Pay Commission was 1.86.
What is the process of determining the salary of employees?
In any system, people work at different levels. Some people are there for very basic work like office work or driver’s work. Then there are some people who are at the level above that like head clerk or section officer. Then there are some people above him who can take big decisions. Then big officials are at the top, they play a big role in making government policies. There are different levels for determining the salaries of these employees in the government. According to the Seventh Pay Commission, there are about 18 such pay levels. Then there are different pay bands according to the work of the employees. There are five pay bands in the present system. The first pay band which is the basic pay band is Rs 5200 to 20200. Then the second one is 9300 to 34800 and then the pay band above this is 15600 to 39100. Then the gradation of the employees is decided according to their preferences within the pay band. After the pay band, grade pay is added to the salary of the employees on the basis of gradation. On top of that, employees are given the benefits of HRA and DA.
Now let us understand how salary is calculated?
Suppose a man joins a government job for the first time and is in the junior post, then he will be entitled to the salary under the prescribed minimum pay band. According to the recommendations of the Seventh Pay Commission, this pay band is Rs 5200 to 20200. Now there are four grade pay within this pay band. These four grade pay are 1800, 1900, 2000, 2400, 2800. After every four years of service, an employee can get promoted and reach the next grade pay. We are telling you about the calculation of salary on the basis of minimum grade pay.
What is the formula for calculating salary?
Pay Band + Grade Pay = Basic Pay x Fitment Factor + Dearness Allowance (DA) + House Rent Allowance (HRA) + Traveling Allowance = Gross Salary.
How to calculate salary based on this formula?
What can change after the recommendations of the Eighth Pay Commission?
One thing is clear here that when the recommendations of the Eighth Pay Commission come, the fitment sector will be at the centre. If the fitment factor is increased then there can be a huge jump in the basic salary of the employees. There is discussion that the fitment factor can be increased from 2.57 to 2.86 by the Eighth Pay Commission. Employee organizations are demanding a fitment factor of 3.0 from the government. Now if the new pay commission does not make any recommendation for change in pay band or grade pay and only increases the fitment factor to 2.86, then see what change can happen in the salary.
If dearness allowance is not received, what can be the new salary?
After the approval of the Eighth Pay Commission, another question is arising in the minds of people. That is regarding dearness allowance and dearness relief. It is believed that as soon as the 8th Pay Commission is implemented, DA and DR given to pensioners will be reduced to zero, because there was a provision for this in the 5th Pay Commission. Under this provision, if DA and DR were more than 50%, it was added to the basic salary or basic pension. However, there was no such thing in the recommendations of the Sixth and Seventh Pay Commission.
What was said on DA and DR in the 7th Pay Commission?
DA was not merged into basic pay in the Sixth and Seventh Central Pay Commission. Rather, after the implementation of the recommendations of the new Pay Commission, the salary is decided on the basis of fitment factor. In such a situation, dearness allowance is not included in it at this time. Dearness allowance is added in future or on the basis of the recommendation of the Pay Commission. Normally the government increases dearness allowance twice a year.
How much will the salary increase if dearness allowance is not added?
Suppose, if the government implements the recommendations of the new Pay Commission, then initially dearness allowance will not be included in it. Then know how the salary will be calculated.
If only the fitment factor is changed, by how much percent will the minimum wage increase?
So, if the New Pay Commission in its recommendations simply increases the fitment factor from 2.57 to 2.86, then the salary of the minimum wage employees in the Central Government can increase by at least 175% as compared to the present. At the same time, even if the employees do not get dearness allowance initially after the implementation of the new Pay Commission decisions, the salary will increase by at least 82%. However, at present all these things are just speculations. Now the government has given the green signal for the formation of the Pay Commission. Now its members and president will be decided. After this, there will be commission meetings, only then will the recommendations of the pay commission come and only then will it be decided how much the salary of the employees will increase.
