The 8th Central Pay Commission, set to change salaries for over 50 lakh central government employees and 65 lakh pensioners, has been creating quite some buzz owing to its proposal for an increase of the fitment factor for 2025. It may be implemented in January 2026, bringing huge financial gains. This article discusses the fitment factor, possible salary increments, and the steps employees could take to prepare for it.
Understanding the Fitment Factor
The fitment factor is a multiplier that is applied to arrive at the revised basic pay under the 8th CPC for the purpose of maintaining uniformity at various pay levels. The 7th CPC fix was 2.57, which raised the minimum basic pay from ₹7,000 to ₹18,000. Projections for the 8th CPC are around 1.92 to 2.86, while unions are demanding 3.68. Higher the factor, bigger will be the increase in salaries and pensions. Moreover, pensions were devalued since the inflation rate was 5.2% in 2024.
Expected Salary Hikes
A fitment factor of 1.92 can make a minimum basic of ₹18,000 become ₹34,560, while it may go up to ₹51,480 under 2.86. In the case of a ₹50,000 paid basic salary, after revision, it may be from ₹91,500 (1.83) to ₹123,000 (2.46). As mentioned, the DA and its likely rate of 59% by July 2025 shall again be brought down to zero, practically offsetting increased wages by 13-34%. These enhancements will also see an increase in allowances accorded on the basis of a percentage of the basic pay, like HRA and TA.
Allowances and Pensions in the Scenario
Revised fitment factor will benefit:
- HRA: Expected to go up to 30% in metro cities, e.g., ₹15,444 for a ₹51,480 basic salary.
- TA: To be increased to somewhere between ₹1,350 and ₹7,200 depending on grade and city.
- Pensions: Minimum old-age pensions will go up from ₹9,000 to between ₹20,500 and ₹25,740, a good news for all pensioners.The resetting of DA will constrain the effective increase in salary, but the DA revision, twice a year, will come into effect soon enough to support inflation and provide long-term relief.
Hiking Preparations
Employees should:
- Update records: Bank, Aadhaar, PAN, etc., should be kept up to date to avert payment delays.
- Engage with unions: Be a part of associations such as NC-JCM and stay updated on appeal matters.
- Plan finances: Prepare budgets factoring extra NPS contributions and higher take-home pay.Price of the hike, which stands at 1.8–3.2 lakh crore ₹, would activate economic activities, mostly in retail; however, selection of avenues should be done very carefully, lest one loses out on these gains.
Also Read: Big DA Hike Gift Coming Soon: Employees May See Huge Salary Jump