Latest news with #6thPayCommission
Time of India
10-07-2025
- Business
- Time of India
8th Pay Commission: 30-34% salary hike likely for government employees, says report, check the likely fitment factor, other key details
Potential hike of 30-34% in wages & pensions could be on the table Compensation structure of government employees Why the 8th Pay Commission may be delayed beyond January 2026 Many government employees are eagerly awaiting the implementation of the 8th Pay Commission . The 8th Pay Commission is likely to significantly boost government salaries and pensions by 30-34%, impacting around 11 million beneficiaries, as per a recent report by a brokerage firm Ambit recommendations of the 8th Pay Commission are scheduled to come into effect from January 2026 but it will only be implemented once the report prepared, sent to government and its recommendations are approved.A research report by brokerage firm Ambit Capital suggests that a potential hike of 30-34% in salaries and pensions could happen once the 8th Pay Commission is implemented."The 7th Pay Commission (January 2016 - December 2025) had implemented a modest salary hike of ~14% (lowest since 1970). We expect the 8th Pay Commission to announce a hike of 30-34% for salaries & pensions to cover ~11mn beneficiaries to boost consumption," the report states.A Pay Commission is established every ten years specifically to boost government salaries, aiming to keep them competitive with the private sector to ensure parity and retain skilled the 8th Central Pay Commission (CPC) was announced earlier this year. However, details regarding its terms of reference, members, and chairman have not yet been declared. The 8th Pay Commission will replace the 7th CPC, which came into effect in 2016. The 8th Pay Commission will affect the basic pay, allowances, pensions, and retirement benefits of government Pay Commission's recommendations will directly benefit approximately 4.4 million central government employees across various ministries and departments, and 6.8 million pensioners (~11.2 million direct beneficiaries). The Commission will review and propose adjustments to their salary structure, allowances, and other 'fitment factor' is an important multiplier in determining the hike in government salaries. The revised basic pay for any Pay Commission is calculated by multiplying the current basic pay by the fitment factor, which determines the pay increase for fitment factor varies across different pay commissions. For instance, the 7th Pay Commission recommended a common fitment factor of 2.57, which increased the minimum basic pay for central government employees to Rs 18,000 per month from Rs 7,000. There have been speculations about considering a higher fitment factor (2.57-2.86) this research report states, "It is important to note that, even with a 2.57 fitment factor in the 7th Pay Commission, overall government salaries did not grow by 2.57x, only the base pay did. As soon as a Pay Commission ends, the dearness allowance (DA) becomes zero as the index is re-based. Previously, under the 6th Pay Commission, an employee earning a basic pay of Rs 7,000 actually took home Rs 15,750 (which included a 125% Dearness Allowance) plus an additional Rs 4,550 in allowances for components like travel and accommodation."The 7th Pay Commission introduced a fitment factor of 2.57, raising the minimum basic pay to Rs 18,000. However, DA was reset to zero at the start of the new Commission. So, the actual increase in the salary component was 14.3% (Rs 18,000 over the previous Rs 15,750). Factoring in the allowances, the overall compensation saw an increase of 23% in the first 6th Pay Commission (2006) recommended a significant increase in pay and allowances (~54%).Meanwhile, the 7th Pay Commission (2015) recommended an increase of 14.3% in basic pay (the lowest growth amongst the last 4 Pay Commissions), and introduced a new pay matrix system. Ahead of the 8th Pay Commission, we attempt to make assumptions about the range of fitment factors, drawing on the historical increases observed in past Pay Commissions: 14.3% (among the lowest effective increase in overall salary, seen with the 7th Pay Commission) and 54% (the highest overall increase, seen with the 6th Pay recommendations).Actual Increase in Salary= (Fitment factor)/ (1+Last Dearness Allowance).The report suggests that the fitment factor for the 8th Pay Commission could be anywhere between 1.83 and 2.46. Depending on the salary growth seen over different Pay Commissions, the range of fitment factors that the government could be looking at lies between 1.83 and understand how new salaries are calculated for government employees, it is important to understand the existing salary structure. Typically, the basic compensation package for government employees in India comprises basic pay, dearness allowance (DA), house rent allowance (HRA), transport allowance (TA), and other allowances, besides pension. Over time, the share of basic pay in salaries has gone down from 65% to roughly 50%, while other allowances have are the various components of a government employees' salary:It is the fixed core component of the salary, determined by the employee's pay level and it reflects their role and is a cost-of-living adjustment. It is a percentage of the basic salary designed to neutralise the impact of inflation and maintain purchasing power. DA rates are revised periodically, typically twice a year, based on the Consumer Price Index (CPI). For instance, if basic pay is Rs 18,000 and the current DA rate is 50%, then DA equals 50% of Rs 18,000 = Rs 9,000. This Rs 9,000 is added to the basic pay, making the total pay higher to offset rising living costs.A portion of basic pay (27%, 18%, or 9%) to cover rental housing expenses, varying by location.A fixed monthly amount to cover commuting costs, based on pay level and city type.8th Pay Commission's impact on pensionsThere are 6.8 million Central government pensioners, higher than the number of active government employees. The impact of the 8th Pay recommendations on pensions will likely be similar to government salaries. Pensions comprise salaries and dearness allowance, but do not have HRA and travel allowance components. This means the basic pay component will increase by the fitment factor, while the dearness allowance will be reset to has been some contention around the National Pension Scheme (which replaced the OPS) regarding the guaranteed post-retirement pension corpus. As a result, the government modified the existing NPS into the Unified Pension Scheme (UPS) effective from April 2025. This new option under NPS is a hybrid of defined contribution and defined benefit scheme as 50% of the last drawn salary (as base pay) has now been guaranteed from are chances of a delay in the Commission's formation, which could eventually lead to higher arrears if implementation is pushed back. The 7th Pay Commission, which was implemented in January 2016, had been announced nearly two years earlier, in February 2014. This gap allowed sufficient time for report preparation, cabinet approval and rollout. As of mid 2025, the 8th Pay Commission has not yet been formed, and its crucial Terms of Reference (ToR), which define its scope and objectives still remain to senior officials, internal discussions are ongoing, but the slow pace of bureaucratic processes means that the rollout may extend well beyond the anticipated January 1, 2026 date. Even if the Commission is announced by the end of this year, historical timelines suggest that the process from announcement to implementation usually takes 18-24 months. At this rate, the pay hike could realistically arrive only by late 2026 or even early to this possible delay are fiscal challenges. The government is balancing welfare spending, election commitments and fiscal deficit targets. A substantial hike could place a significant burden on the exchequer, prompting policymakers to move cautiously.
News18
10-07-2025
- Business
- News18
8th Pay Commission: Fitment Factor Might Be Fixed Between 1.83 And 2.46, Says Report
Last Updated: On fitment factor between 1.83 and 2.46, the minimum salary of central government employees may be fixed between Rs 32,940 and Rs 44,280, against the current Rs 18,000 a month. 8th Pay Commission Salary Hike: Even as the 8th Central Pay Commission is yet to be constituted, a report suggests that the fitment factor is expected to be fixed in the range of 1.83 to 2.46. Fitment factor is the multiplier used to revise basic pay in a new pay commission. 'As per back-of-the-envelope calculations, depending on the salary growth seen over different Pay Commissions, the range of fitment factors that the government could be looking at lies between 1.83 and 2.46," financial services firm Ambit Capital said in a report. What Is A Fitment Factor? The fitment factor is a multiplier used by the government to revise the basic salary of employees when a new Pay Commission is implemented. It helps determine the new pay by applying the factor to the existing basic salary. For example, if an employee's current basic salary is Rs 18,000 and the fitment factor is 2.0 (just for example), the revised basic salary would be Rs 36,000 (Rs 18,000 × 2.0). This does not include allowances like HRA or DA, which are calculated separately and increase overall take-home pay further. 8th Pay Commission: How Much Salary Hike Expected? Going by Ambit Capital's expectation of a fitment factor between 1.83 and 2.46, the minimum salary of central government employees may be fixed between Rs 32,940 and Rs 44,280, compared with the current Rs 18,000 a month. A fitment factor of 1.83 would raise the basic salary from Rs 18,000 to around Rs 32,940, while a factor of 2.46 would raise it to Rs 44,280. Ambit Capital in the report estimates that the 8th Pay Commission may result in a minimum 14% real hike in pay (including Basic Pay+DA) and a maximum of 54%. However, the maximum 54% hike in real pay is highly unlikely as the government could face significant financial challenges in implementing the same. 'While the government might consider a higher increase, potentially using it as a consumption stimulus, expecting a substantial 54% jump (as seen during the 6th Pay Commission) seems unlikely, since it could face significant financing challenges," the report said. For fitment factor calculations, the report has assumed real income growth of 14.3% (worst case) and 54% (best case). The middle case fitment factor is just the average of the 2 fitment factors. Historically, pay commissions have enabled real salary hikes of 14% to 54%. 8th Pay Commission Salary Hike: Best, Worst, & Middle Case Scenarios Sharing middle and worst case scenarios, the report pegs salary hike of central government employees at 34% and 14%, respectively. 'Our estimates suggest hikes around 30-34% could be under consideration in the 8th Pay," the report said. 'Assuming a current basic pay of Rs 50,000 and with Dearness Allowance (DA) projected to reach 60% by the end of 2025 (up from the current ~55% with one more likely increment), salaries are expected to increase by at least 14% under the 8th Pay Commission. This growth at about 14% represents the lowest threshold seen across the last four Pay Commissions (including the current one)," the report said. 8th Pay Commission: When Will It Be Implemented? The 8th Pay Commission was announced in January 2025. However, it has not been constituted yet. The central government will announce the terms or reference (ToR), members and chairman of the 8th CPC soon. The Department of Expenditure (DEA), under the Ministry of Finance, has put forward a proposal to fill 35 positions in the 8th Pay Commission through deputation. According to reports, the implementation of the 8th CPC is likely to be delayed as against the earlier expectation of January 1, 2026. The recommendations of the latest pay panel could be implemented in late 2026 or 2027. tags : 8th Pay Commission view comments Location : New Delhi, India, India First Published: July 10, 2025, 13:07 IST News business » economy 8th Pay Commission: Fitment Factor Might Be Fixed Between 1.83 And 2.46, Says Report | Check Likely Salary Hike Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Indian Express
02-06-2025
- Business
- Indian Express
HC freezes one-third salary of Punjab health secretary in pension row
The Punjab and Haryana High Court has recently ordered the attachment of one-third of the salary of the Principal Secretary, Health and Family Welfare, Punjab, until compliance is ensured with a prior court judgment granting pension benefits to retired Senior Lecturer Dr Parveen Parkash. Parveen Parkash, who retired from Guru Gobind Singh Medical College and Hospital, Faridkot, had initially approached the court through his advocate Abhilaksh Gaind, filing a contempt petition to address the non-implementation of a July 13, 2023, high court judgment. That judgment had directed his promotion/redesignation as Senior Lecturer, effective from August 16, 1991, with corresponding revisions to his pension and retiral benefits. Despite this order, Parkash alleged that the promised benefits remained unfulfilled. The dispute escalated during a resumed hearing on March 5, 2025, when the state counsel assured the court that arrears of pension from April 1, 2017, to June 30, 2021, along with leave encashment differences, would be released within three weeks. Relying on this undertaking, the contempt petition was withdrawn. However, the court had cautioned that failure to comply would allow the petitioner to revive the petition, with the erring officer liable to pay Rs 50,000 in costs from their personal funds. Despite this warning, the arrears were not released, and the leave encashment was erroneously calculated based on the 5th Pay Commission's pay scale, while Parkash's pension had been revised under the 6th Pay Commission. This discrepancy prompted Parkash, represented by advocates Abhilaksh Gaind and Rakesh Roy, to file an application to revive the contempt petition, citing a false statement made to the court. Parkash contended that his arrears of pension from April 1, 2017, to June 30, 2021, and the difference in leave encashment were not correctly calculated or released. He highlighted that the leave encashment was computed based on the 5th Pay Commission's pay scale of Rs 72,380, whereas his pension was revised to Rs 1,91,400 under the 6th Pay Commission effective January 1, 2025. This discrepancy, he argued, led to an underpayment of Rs 3,00,812 instead of the entitled Rs 9,88,645. Expressing serious concern over the state's conduct, Justice Harkesh Manuja remarked, 'It does not appear to be a bona fide error on the part of the non-applicant/respondent, as such the applicant-petitioner is unnecessarily compelled to approach this Court by filing the revival application.' Consequently, the court attached one-third of the Health Secretary's salary until compliance is achieved, directing the IAS Branch, Punjab Civil Secretariat, Chandigarh, to enforce the order. The matter is now adjourned to July 28, 2025, for further proceedings, with the case placed on the urgent cause list.
Hindustan Times
02-06-2025
- Politics
- Hindustan Times
Ludhiana: Demanding job regularisation, computer teachers hold protest
The Computer Teachers Union of Punjab held a state-level protest on Sunday, outside the residence of Rajya Sabha member Sanjeev Arora, drawing attention to the government's alleged neglect of long-standing demands of computer teachers. Union leaders sharply criticised the Punjab government for what they called a deliberate delay in fulfilling their legitimate demands. These include the implementation of the 6th Pay Commission, regularisation under Punjab Civil Service Rules and full benefits in death cases and regular service. Union leaders pointed out that computer teachers have been working in regular roles since 2011. Over the past three years, the union has held several meetings with the government. 'While our demands were acknowledged as valid during these meetings, no actual steps have been taken to resolve them,' said one of the protesters. Teachers feel they are being deliberately ignored, despite their continued contributions to the education system. The union announced that a larger rally would be held outside the Education Bhawan in Mohali later in June. They also declared that if their issues are not resolved, a massive state-wide protest would follow, for which the government and administration would be fully responsible. Union leaders present at the rally included Punjab general secretary Harpreet Singh, senior vice presidents Harjeet Singh Sandhu, Anil Aeri, Rakhi Mannan, Sikander Singh and Paramveer Singh Sandhu, along with Gurpreet Singh from Mansa and district leaders like Har Rai Kumar (Ludhiana), Ravinder Singh (Hoshiarpur), Gurpinder Singh (Gurdaspur), Davinder Singh (Ferozepur), including many more supporters from different districts were also present. Har Rai Kumar, district president of the Computer Teachers Union, said, 'We met MP Sanjeev Arora on Sunday, and he has assured us that he will help arrange a meeting with the concerned officials in the coming week. But the truth is, we have already met the education minister and several other officials multiple times but to no avail. That is why we now want to meet the chief minister directly to resolve our issues.' Rajya Sabha member Sanjeev Arora said, 'I have fixed their meeting with the finance minister on Monday.'
News18
31-05-2025
- Business
- News18
8th Pay Commission: Level 1 Salary May Rise Nearly 40% With 1.92 Fitment Factor
Last Updated: The fitment factor is a multiplier used to calculate the revised basic pay for central government employees when a new pay commission is implemented. 8th Pay Commission: The 8th Pay Commission, officially announced in January 2024, is expected to be set up soon to revise salaries, pensions, and allowances for central government employees and retirees. Historically, pay commissions have revised salaries about every 10 years. The 6th Pay Commission (2006) and the 7th Pay Commission (2016) brought significant increases in basic pay and allowances. The minimum basic salary of central government employees was increased from Rs 2,750 to 7,000 under the 6th CPC, and from 7,000 to Rs 18,000 under 7th CPC. The pressing question among all employees and pensioners is how much their salary is expected to be increased in the 8th pay commission. What Is the Fitment Factor? The fitment factor is a multiplier used to calculate the revised basic pay for central government employees when a new pay commission is implemented. It ensures uniform salary hikes during the transition from the old to the new pay structure. Formula: New Basic Pay = Old Basic Pay × Fitment Factor Under the 7th Pay Commission, the fitment factor was set at 2.57. For instance, if an employee's basic pay was Rs 10,000 under the 6th CPC, their revised pay became: Rs 10,000 × 2.57 = Rs 25,700 According to several reports, the fitment factor could be 1.96 in the 8th pay commission. How Much Level 1 Employee Would See The Salary Hike On Fitment Factor Of 1.92? The 7th Pay Commission, introduced in 2016, replaced the old grade-pay system with a new structure called the Pay Matrix. This system categorizes salaries based on job positions, ranging from level 1 to level 18. Level 1: Entry-level positions such as peon, clerk, MTS If the fitment factor is 1.92, then Level 1 government employees may see a salary jump of around Rs 15,000 per month, which is about a 40% increase in take-home pay under the 8th Pay Commission. First Published: May 26, 2025, 08:24 IST
