The Eighth Central Pay Commission, which had been set up in January 2025, will now revise the salaries of employees of the central government effective from January 2026. Therefore, there is a lot of speculation regarding the fitment factor and salary increases, with a huge number of over 50 lakh employees and 65 lakh pensioners awaiting clarity. This article provides estimated net pay statements for Grade Pay 1800 to 4600, using a 1.92 fitment factor, plus major components like HRA, TA, and deductions.
Projected Salary Increases
With the launch of 8th CPC, a fitment factor of 1.92 is expected to be applied against 2.57 by the 7th CPC, with Dearness Allowance (DA) being reset to 0%. For Grade Pay 1800 (Level 1), a present basic pay of ₹18,000 may be increased to ₹34,560, and for Grade Pay 4600 (Level 7) with basic pay at ₹44,900, it would be ₹86,208. This is an estimation, keeping in view a somewhat modest hike of 20-34%, which is a balance between inflation (projected at about 5.2% in 2024) and fiscal constraints. These figures can only be actualized once the recommendations of the commission are laid down-finally, which is expected before the end of 2025.
Salary Components Breakdown
The calculations include:
- House Rent Allowance (HRA): 30% in X-class cities (Delhi, Mumbai, etc.). HRA for Grade Pay 1800 is ₹10,368, and for Grade Pay 4600, it is ₹25,862.
- Transport Allowance (TA): Metro cities have higher rates than other cities; it ranges from ₹1,350 for Grade Pay 1800 to ₹7,200 for Grade Pay 4600.
- National Pension System (NPS): 10% of basic pay, e.g., ₹3,456 and ₹8,621 for Grade Pay 1800 and 4600, respectively.
- Central Government Health Scheme (CGHS): At current rates, e.g., ₹250 for lower grades; ₹500 for higher.
The gross salary for Grade Pay 1800 is estimated at ₹49,518, with net pay after NPS and CGHS deductions at ₹45,812. According to calculations, the gross salary for Grade Pay 4600 reaches ₹119,270, with a net salary of ₹110,149.
Fitment factor controversy
The proposed fitment factor of 1.92 is being debated, with unions demanding 2.57 to equalize the 7th CPC. Higher fitment factors (2.28–2.86) will raise the basic pay for Grade Pay 1800 to ₹41,040–₹51,480 and Grade Pay 4600 to ₹102,372–₹128,514. With fiscal prudence, the Government may restrict the increases, which might leave employees disillusioned expecting greater hikes.
Implementation Timeline
The 8th CPC is being formed, with Terms of Reference and appointments to be made by October 2025. Recommendations are shelved for late 2025 and implementing the same from January 2026. Any delays could place it in 2027, with arrears to fill up the gap. In the meantime, the Finance Ministry is on the job collecting departmental inputs to finalize the structure.
Economic and Employee Impact
This salary hike of ₹2.4–₹3.2 lakh crore would increase consumer spending and thereby provide a fillip to sectors like retail. However, slowdown expectations of DA reset and a lower fitment factor. Employees must stay updated on the developments in DoPT and prepare to alter NPS to maximize benefits.
Also Read:8th Pay Commission Likely Soon: Know When It Will Be Announced