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The 10-month long wait of government employees and pensioners is finally over. The Central Government has officially approved the constitution of the 8th Pay Commission and has also appointed its members. This simply means that now a new structure of your salary, pension and allowances will be prepared, due to which there is bound to be a huge jump in the salary of crores of employees.
However, you will have to wait a little longer for the increased salary, but whenever it is implemented, you will get months of arrears in one go. So let us understand in simple language how this will affect your pocket and what major changes you will see.
Who are the members of the 8th Pay Commission?
The Government has handed over the command of this important Commission to experienced hands:
- Chairman: Justice Ranjana Prakash Desai
- Part-time member: Professor Pulak Ghosh, IIM Bengaluru
- Member-Secretary: Pankaj Jain (Secretary, Petroleum and Natural Gas)
The biggest question: When will the new pay commission be implemented?
This is the most important question. Let us understand it in points:
- Time to submit the report: The Commission has been given 18 months i.e. one and a half years to submit its recommendations to the government.
- Date of implementation: The tenure of the 7th Pay Commission ends in December 2025. Therefore, the 8th Pay Commission will be considered effective from January 1, 2026.
- When will you get the money?: Even if it takes 2-3 years for the Commission to submit its report and the government to implement it (possibly till 2028), you will get the benefit of increased salary only from January 1, 2026. This means that you will get a hefty arrears of 17-18 months in lump sum or in installments.
Scissors can work on these allowances
While on one hand the salary will increase, on the other hand some unnecessary allowances can be eliminated or merged with other allowances. The Commission will review all the existing allowances. If this happens, travel allowance, special duty allowance, and minor departmental allowances may be cut.
How much will your salary increase? Understand the complete mathematics of fitment factor
How much your salary increases depends on a magic number called ‘fitment factor’.
- What is Fitment Factor?: It is a multiplier by which your existing basic salary is multiplied to decide the new basic salary.
- What can be the fitment factor?: It is expected that it can be between 2.46 to 2.57.
- Understand with example:
- Suppose you are a level-1 employee and your basic salary is ₹ 18,000.
- If the fitment factor is 2.57, your new basic salary will be: ₹18,000 x 2.57 = ₹46,260. (Note: There are some calculation errors in the examples given in the source, this is a simple calculation).
- Similarly, if your basic salary is ₹ 50,000 and fitment factor is fixed at 2.57, then your new basic salary will be ₹ 1,28,500.
Big decision on Dearness Allowance (DA)
Whenever a new pay commission comes into effect, the existing dearness allowance is added to the basic salary and the DA calculation starts again from ‘zero’. This increases your basic salary further, the benefit of which you also get in other allowances like HRA.
Overall, there is sure to be a big increase in the salary and pension of about 50 lakh central employees and 65 lakh pensioners i.e. more than 1 crore people.