The Union Cabinet, led by Prime Minister Narendra Modi, has approved the formation of the 8th Central Pay Commission (CPC) to revise the salary structure of central government employees and pensioners.
This decision is set to impact approximately 49 lakh central government employees and nearly 65 lakh pensioners.
Key Highlights of the 8th Pay Commission
- Approval Date: January 16, 2025
- Implementation Timeline: Recommendations are expected by 2026, with implementation slated for January 1, 2026.
- Beneficiaries: Approximately 49 lakh central government employees and nearly 65 lakh pensioners.
Expected Changes in Salary Structure
The 8th Pay Commission is anticipated to introduce significant changes to the salary and pension structures:
- Fitment Factor: The fitment factor, which determines the hike in basic pay, is expected to increase. In the 7th CPC, the fitment factor was set at 2.57, leading to a minimum basic pay of ₹18,000. Speculations suggest that the 8th CPC may recommend a fitment factor of 2.86, potentially raising the minimum basic pay to ₹51,480.
- Pension Revision: Pensioners are also likely to see a proportional increase in their pensions, aligning with the revised salary structures. The minimum pension, which was ₹9,000 under the 7th CPC, is expected to rise correspondingly.
Formation and Function of the Pay Commission
A Pay Commission is established by the Government of India to review and recommend changes in the salary and pension structures of its employees and pensioners. Historically, a new Pay Commission is constituted every 10 years. The 7th Pay Commission was implemented on January 1, 2016, and its term concludes in December 2025. The timely formation of the 8th CPC ensures that its recommendations can be reviewed and implemented from January 1, 2026.
Government’s Perspective
Union Minister Ashwini Vaishnaw stated that the formation of the 8th Pay Commission aims to improve the quality of life for government employees and boost consumption. He emphasized that consultations will be held with central and state governments and other stakeholders to ensure comprehensive recommendations.