8th Pay Commission: Few Days Ahead the Budget 2025 is set to be brought in the Lok Sabha, the Union Cabinet receives grudging approval to the creation of the 8th Pay Commission which will review salaries and other allowances for all Central Government Employees, Apart from the salaries, the pensions of the central government employees are also set to be revised.

In view of the fact that the 7th Pay Commission is almost at its sunset period by 2026, Nirmal Singh’s Modi in 2016 brought in place a Cabinet decision to effect the new commission. Hence, the chairman of the commission and the two commission members will be appointed and meetings with the central and state ministers and other relevant stakeholders will be had.

In line with the salary increase, 8th Pay Commission will incur raising of allowances making them revised for government employees. It is most probable that fitment factor for calculation of salary and pension for the employees will increase from 2.57 to 2.86. Henceforth this may effect the rate of the maximum basic going from Rs 18000 to Rs 51,480.

It is interesting to note that every decade a pay commission is set up by the Centre to revise the pay scale of the employees of the central government. In addition to changing the base salary, a pay commission also has a ToR which defines the scope of work to include revising pension payments. As it stands, 49 lakh central government employees and over 65 lakh pensioners will be covered by the forthcoming 8th Pay Commission.

Due to the anticipated increase in fitment factors, as a result, there will also be anticipated adjustment to salary structures, thereby altering the existing pension structure.

8th Pay Commission: Adjustments Relating to Pension Structure

At this time, the central government employees and pensioners receive salary and pension according to the 7th Pay Commission which came into effect on January 1, 2016 and is valid up to 2026. If the estimates by experts are anything to go by, then the fitment factor could reach a whopping 2.86. This will ease pension rates from Rs 9,000 to between Rs 22,500 and Rs 25,200 according to the Financial Express.

In addition to the amendment in the basic pension allowance, other benefits are also going to be revised. Having said that, the salary structures would increase approximately by 186 percent due to the introduction of the 2.86 fitment factor, and this is considering the significant effect that it has on the revised pension rendered.

Referring a report by Economic Times, Nihal Bhardwaj, senior associate at SKV Law Offices pointed out that The pensions for the eighth pay commission are expected to be adjusted with the revised salaries. Applying across-the-board increases of 25-30 on average, further stating it as this is what previous commissions also did.

The lowest pension also was increased and it ranged from Rs 2,500 to Rs 9,000 whilst the lowest and basic pay went up from Rs 7,000 to Rs 18,000 while the fitment factor was set at 2.57 during the 7th Pay Commission scale.