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8th Pay Commission: This commission will submit its report in 18 months. It is expected that employees’ salaries will increase by the year 2027. Learn here about the salary structure of the 8th Pay Commission. 8th Central Pay Commission: The central government recently approved the Terms of Reference (ToR) of the 8th Central Pay Commission. This paves the way for salary increases for approximately 5 million central government employees and over 7 million pensioners. The commission will submit its report within 18 months. It is expected that employees’ salaries will be increased by 2027. Here’s what the salary structure of the 8th Pay Commission might look like. Commission Structure The 8th Pay Commission will be a temporary body consisting of a chairperson, a part-time member, and a member-secretary. It will be headed by Justice (Retired) Ranjan Desai. The commission will submit its report within 18 months. If necessary, it may also send an interim report. What the Commission will consider: The country’s economic situation and the need for financial discipline. The availability of resources for development and public welfare. The burden of non-contributory pension schemes. The financial situation of states, as states also adopt central government recommendations. Salaries and perks of public sector and private sector employees will be compared. Fitment Factor: The Basis for Pay Increases The Fitment Factor will play a key role in the 8th Pay Commission. It is a multiplier based on which the basic pay increase of employees is determined. According to estimates, it could be between 1.8 and 2.57. If the fitment factor is set at 1.8, then… Level 1 (₹18,000 basic pay) – ₹32,400 Level 2 (₹19,900 basic pay) – ₹35,820 Level 3 (₹21,700 basic pay) – ₹39,060 If the fitment factor is set at 2.46, then Level 1 – ₹44,280 Level 2 – ₹48,954 Level 3 – ₹53,382 If the fitment factor is set at 2.57, then Level 1 – ₹46,260 Level 2 – ₹51,143 Level 3 – ₹55,769 That is, the new Pay Commission is likely to result in a salary increase of 80% to 157%. Allowances will also change With the implementation of the 8th Pay Commission, dearness allowance (DA) will be added to the existing basic pay. New calculations will also be made for house rent allowance (HRA) and travel allowance (TA). Pension reforms will also occur The commission will also provide relief to pensioners. Pension amounts will increase and equity in pension payments will be addressed. The system for timely pension payments will be simplified. New Pay Matrix A revised pay matrix will be introduced under the new Pay Commission, making it easier to understand employees’ salary grades and increment structures. Read More: Income Tax: Good news for taxpayers! Taxpayers will no longer receive notices for these mistakes after filing their income tax returns.
