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Extensive discussion is going on on the possible formation and recommendations of the 8th Pay Commission regarding revision of salaries, allowances and pensions of central employees and pensioners. Usually, the central government arranges a new pay commission every 10 years. The 7th Pay Commission came into effect from January 1, 2016, after which the minimum basic salary of employees increased from ₹7,000 to ₹18,000 per month. Now under the proposals of employee unions and experts, there is a demand to increase the fitment factor in the 8th Pay Commission and fix it between 2.86 to 4.0. If the demand for a maximum fitment factor of 4.0 is considered, the Level-1 basic salary can go straight from ₹18,000 to ₹72,000, while at a more realistic fitment factor of 2.86 it is estimated to be around ₹51,480.
Fitment Factor is the multiplier or formula on the basis of which the basic pay of the previous pay commission is converted into the revised basic pay of the new pay commission.
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A fitment factor of 2.57 was implemented in the 6th to 7th Pay Commission, due to which the minimum basic pay was fixed at ₹7,000 × 2.57 = ₹18,000.
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2.86 Mathematics of Fitment Factor: If the fitment factor in the 8th CPC is fixed at 2.86, then the minimum basic salary will be ₹18,000 × 2.86 = ₹51,480 Will be per month.
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3.68 Mathematics of Fitment Factor: If the old demand of Rs 3.68 of employee organizations is accepted, then basic pay will be ₹ 18,000 × 3.68 = ₹66,240 Will be per month.
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Maximum scenario of 4.0 fitment factor: If fitment factor 4.0 is applied, then basic salary is ₹18,000 × 4.0 = ₹72,000 Will be registered every month.
There are a total of 18 pay levels in the central pay structure, which includes officers from Group-C to Cabinet Secretary level. Comparative format of level-wise initial basic pay based on fitment factor of 2.86 (probable standard) and 4.0 (proposed maximum):
| Pay Level | Post/Grade Pay Level | 7th CPC Beginner Basic Pay | 8th CPC (at 2.86 fitment) | 8th CPC (at 4.0 fitment) |
| Level 1 | Group ‘D’ / MTS (GP 1800) | ₹18,000 | ₹51,480 | ₹72,000 |
| Level 2 | Lower Division Clerk/LDC (GP 1900) | ₹19,900 | ₹56,914 | ₹79,600 |
| Level 3 | Constable/Junior Clerk (GP 2000) | ₹21,700 | ₹62,062 | ₹86,800 |
| Level 4 | UDC/Head Constable (GP 2400) | ₹25,500 | ₹72,930 | ₹1,02,000 |
| Level 5 | Senior Clerk/Assistant (GP 2800) | ₹29,200 | ₹83,512 | ₹1,16,800 |
| Level 6 | Sub-Inspector/Executive (GP 4200) | ₹35,400 | ₹1,01,244 | ₹1,41,600 |
| Level 7 | Inspector/Section Officer (GP 4600) | ₹44,900 | ₹1,28,414 | ₹1,79,600 |
| Level 8 | Assistant Accounts Officer (GP 4800) | ₹47,600 | ₹1,36,136 | ₹1,90,400 |
| Level 9 | Group ‘A’ Junior Entry (GP 5400) | ₹53,100 | ₹1,51,866 | ₹2,12,400 |
| Level 10 | Civil Services Group A Entry (GP 5400) | ₹56,100 | ₹1,60,446 | ₹2,24,400 |
| Level 11 | Under Secretary/Senior Time Scale (GP 6600) | ₹67,700 | ₹1,93,622 | ₹2,70,800 |
| Level 12 | Deputy Secretary/JAG (GP 7600) | ₹78,800 | ₹2,25,368 | ₹3,15,200 |
| Level 13 | Director Level (GP 8700) | ₹1,23,100 | ₹3,52,066 | ₹4,92,400 |
| Level 14 | Joint Secretary Level (GP 10000) | ₹1,44,200 | ₹4,12,412 | ₹5,76,800 |
| Level 15 | Additional Secretary level | ₹1,82,200 | ₹5,21,092 | ₹7,28,800 |
| Level 16 | Special Secretary level | ₹2,05,400 | ₹5,87,444 | ₹8,21,600 |
| Level 17 | Secretary to GOI (Apex Scale) | ₹2,25,000 | ₹6,43,500 | ₹9,00,000 |
| Level 18 | Cabinet Secretary of India | ₹2,50,000 | ₹7,15,000 | ₹10,00,000 |
When basic salary is revised, it directly impacts other main allowances received by central government employees:
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Dearness Allowance (DA): As soon as the new Pay Commission comes into force, the existing DA is reset to zero (0%) and the entire DA value is absorbed into the basic pay.
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House Rent Allowance (HRA): HRA rates are decided as a percentage of basic salary depending on the categories of cities (X, Y, Z). By increasing the basic, the total amount of HRA will automatically increase significantly.
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Transport Allowance (TA): There will also be an increase in the transport allowance and DA applicable on it according to different pay levels.
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Pension & Gratuity: The minimum pension of retired employees, which is currently ₹9,000, may also increase to ₹25,000 to ₹36,000 in line with the basic pay. Along with this, it is also possible to increase the maximum limit of retirement gratuity.
The implementation of Pay Commission directly benefits more than 50 lakh serving central employees and more than 65 lakh pensioners. However, this financial amendment has a huge impact on the government exchequer. Until the Central Government formally issues an official notification on the constitution of the Commission, its Chairman and the Terms of Reference (ToR), these figures are based on study proposals prepared by various employee organizations and financial analysts. The actual pay matrix and fitment factor will be decided only after the final approval of the government and the approval of the Cabinet.