The 8th Pay Commission is expected to bring major relief and good news for central government employees. Considering the rising cost of living, the commission’s drafting committee has submitted a proposal to the government recommending significant revisions.
If implemented, the basic pay of Group C employees could see an increase of more than three times. Along with this, the committee has suggested several other key changes aimed at improving overall salary structure and financial stability.
If the government approves these proposals, it could bring a transformative shift in the lives of central government employees, offering them better financial security and improved living standards.
How much can salaries increase under the 8th Pay Commission compared to the 7th Pay Commission? What changes has the committee proposed? And what exactly is the fitment factor that plays such a crucial role in salary hikes? Most importantly, how is this fitment factor decided for the 8th Pay Commission?
Hello, my name is Anurag Tiwari, and you are reading Business Connect Magazine News.
On October 28, 2025, a cabinet meeting led by Narendra Modi officially approved the formation of the 8th Pay Commission. Currently, the commission is in its consultation stage, where various aspects of salary structure and revisions are being reviewed.
On April 14, the drafting committee of the National Council of Joint Consultative Machinery (NCJCM) submitted a proposal. According to this proposal, the minimum basic pay for Group C central government employees could increase from ₹18,000 to ₹68,940.
The NCJCM serves as a platform to address matters between the central government and its employees. It was established in 1996 and is headed by the Cabinet Secretary.
Now that we’ve covered the basics, let’s dive deeper.
To reach a proposed basic pay of around ₹69,000, the suggested fitment factor is 3.83. In comparison, the 7th Pay Commission had a fitment factor of 2.57.
The fitment factor is essentially a multiplier used to calculate the revised salary by multiplying it with the existing basic pay. For example, the current minimum basic pay for Group C employees is ₹18,000. When multiplied by 3.83, it becomes ₹68,940—approximately ₹69,000.
According to reports, the definition of a “family unit” may also change—from three members to five members—potentially including parents as well. This adjustment reflects a more realistic assessment of household expenses.
The proposal also suggests increasing the annual increment rate from 3% to 6%. In addition, labor unions had demanded a simplification of the salary structure. Currently, under the 7th Pay Commission, there are 18 pay levels. The proposal recommends reducing these to just seven levels to make the system more streamlined.
To achieve this, multiple pay levels may be merged. For instance:
- Pay Levels 2 and 3 could be combined into a new Pay Scale 2
- Pay Levels 4 and 5 could form a new Pay Scale 3
- Pay Levels 6 to 10 may also be merged into broader, simplified grades
The proposal places significant emphasis on pensions and allowances as well. It includes recommendations such as restoring the old pension scheme, increasing pension to 67% of the last drawn salary, and setting family pension at 50%.
Additionally, it suggests:
- Revising HRA every five years
- Increasing compensation in case of death during duty
- Removing the cap on leave encashment
- Extending maternity leave and introducing longer parental leave benefits
Now, coming back to the most critical element—the fitment factor.
How was this 3.83 figure determined?
It is based on a detailed expense calculation model. This model evaluates the monthly cost of living for an average family by considering essential expenses such as food, clothing, housing rent, electricity, water, healthcare, and education.
It also factors in modern-day needs like technology, children’s education, and basic entertainment.
The National Council of Joint Consultative Machinery (NCJCM) prepared a comprehensive expense sheet based on a five-member family to estimate the total monthly expenditure, which ultimately helped derive the proposed fitment factor.
By adding all these expenses, the committee concluded that a minimum salary of around ₹69,000 is necessary to maintain a decent standard of living.
But why such a sharp jump—from ₹18,000 to ₹69,000 in basic pay?
The answer is simple: rising inflation.
Over the past decade, the cost of essential needs such as food, housing, healthcare, and education has increased significantly. The Pay Commission is introduced roughly every 10 years to ensure that government salaries are adjusted in line with changing economic conditions and cost of living.
To address this gap, the drafting committee of the 8th Pay Commission has proposed these revisions. If accepted, they could bring substantial relief to central government employees—especially those in Group C—by improving their financial stability and overall quality of life.
