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However, the Narendra Modi government at the Center has not yet made any announcement regarding the 8th Pay Commission. But it is estimated that the government can increase the minimum wage and pension by 186 percent. Obviously, there is no official confirmation regarding this from the government yet, but it is expected to be announced during the upcoming Union Budget. If the government approves it, then changes are likely to be made under the 8th Pay Commission in January next year. The commission may bring major changes in salary hike and welfare measures for central employees and their family members.
8th Pay Commission proposed salary increase
The National Council of Joint Consultative Mechanism (NC-JCM) has recommended that the pay hike for employees will be based on the proposed fitment factor of 2.86. According to the recent report, if the Central Government adopts it then the salary will increase by 2.86 times.
The term ‘fitment factor’ is used as the criteria set for recalculation of pay and pension. He kept the fitment factor at 2.57 as per the terms of the 7th Pay Commission. As a result, he increased the basic salary from Rs 7,000 to Rs 18,000.
If the fitment factor of 2.86 is applied this time too, then the minimum basic pay of central employees is expected to increase from Rs 18,000 to Rs 51,480.
What will be the impact on pension if 8th Pay Commission is implemented?
Retired employees will also benefit from the implementation of the 8th Pay Commission. At present, the lowest pension amount is Rs 9,000, which has been decided on the basis of the 7th Pay Commission’s fitment factor of 2.57. With the implementation of the updated fitment factor of 2.86, the base pension may increase to Rs 25,740.
Eighth Pay Commission Dearness Allowance
Apart from changes in pay and pension, dearness allowance (DA) and other allowances are also expected to be revised in line with the updated basic pay. DA plays an important role in reimbursement of dearness allowance and is usually reviewed twice a year.
Moreover, along with the revision in salary and pension, dearness allowance (DA) and other allowances are also likely to change as per the updated basic pay. Dearness Allowance (DA) is necessary to control inflation and is usually revised every two years.