The government has finally approved the Terms of Reference (ToR) for the 8th Pay Commission, meaning the long wait for a pay and pension revision has truly begun. Justice (Retd.) Ranjana Desai will lead the panel, which will soon begin consultations with employee unions, ministries, and economists before presenting its recommendations.
But what does all this mean for you—especially when reports hint at a fitment factor ranging from 1.8 to 2.46?
What’s This “Fitment Factor,” and Why Does It Matter?
Think of the fitment factor as a multiplier that decides how much your basic salary will rise. The 7th Pay Commission used a factor of 2.57, which turned a ₹10,000 salary into ₹25,700.
This time, experts are predicting something between 1.8 and 2.46. Doesn’t sound like much? Wait till you see the numbers.
The Expected Salary Range for Level 1 Employees
According to research by Kotak Institutional Equities and Ambit Capital, here’s what the potential revision could look like for Level 1 staff (basic pay of ₹18,000):
- Fitment Factor 1.82: Basic pay may rise to ₹32,760
- Fitment Factor 2.15: Basic pay may rise to ₹38,700
- Fitment Factor 2.46: Basic pay may rise to ₹44,280
That’s a pretty wide range! At the top end, the basic pay could more than double—but don’t pop the confetti just yet.
The Catch: Dearness Allowance Reset
Here’s the thing—whenever a new pay commission takes effect, the Dearness Allowance (DA) is reset to zero.
Right now, the DA sits at 58%, which already boosts your take-home pay significantly. So while the headline hike might look like 80% or more, the effective increase—after resetting DA—will be lower.
For instance, Kotak estimates that under a 1.8 fitment factor, the actual hike could be around 13%, not 80%. Ambit Capital, on the other hand, projects an effective increase between 14% and 34%, depending on the final factor the government chooses.
Why Level 1 Employees Are Watching Closely
For many entry-level staff, the last big hike came nearly a decade ago. With inflation eating into daily expenses, a real boost in pay isn’t just about comfort—it’s about survival.
Let’s take a quick example:
A peon earning around ₹29,000 a month (including DA and HRA) could see that rise to roughly ₹33,000–₹39,000 depending on the fitment factor. That might not sound massive, but over a year, it could mean ₹50,000–₹1,20,000 more in your pocket.
And for pensioners? The hike in basic pay will directly raise pension amounts, offering long-awaited relief to retired staff as well.
Why the 8th Pay Commission Matters Now
This isn’t just about numbers on paper. The 8th Pay Commission will influence:
- Over 50 lakh central government employees
- More than 60 lakh pensioners
- And indirectly, millions of households dependent on them
A higher fitment factor doesn’t only increase take-home pay—it also lifts morale, improves spending capacity, and can even give the economy a small push through higher consumption.
What Happens Next?
The Commission will now begin its work—consulting ministries, employee associations, and financial experts. Once its report is submitted, the government will decide when and how to implement the recommendations, likely around 2026.
So yes, there’s still time before you’ll see that bigger paycheck. But the process is officially moving, and expectations are high.
If the fitment factor ends up near 2.15 or above, it could mark one of the biggest jumps in Level 1 pay scales in recent years.
Frequently Asked Questions
1. When will the 8th Pay Commission recommendations be implemented?
The recommendations are expected to be submitted in 2026, after which the government will decide the rollout date.
2. What is the likely fitment factor under the 8th Pay Commission?
Experts expect it to range between 1.8 and 2.46, which could mean salary increases of 13% to 54% depending on the level.
3. Will pensions also increase under the 8th Pay Commission?
Yes. Pension amounts are directly linked to revised basic pay, so retirees will also benefit from the higher fitment factor.