When Will 8th Pay Commission Submit Its Recommendations? Salary, Bonus, Gratuity To Be Revised

When Will 8th Pay Commission Submit Its Recommendations? Salary, Bonus, Gratuity To Be Revised

8th Pay Commission: Central government employees await the revision of their salaries after the government announced the terms of reference (ToR) of the 8th Pay Commission last week. The three-member pay panel, led by Justice Ranjana Desai, will make recommendations to revise salaries, bonuses, gratuity, and performance-linked incentives.

8th Pay Commission: What Are The Terms Of Reference (ToR)?

The ToR outline the scope, objectives, and key tasks of the Pay Commission, such as reviewing the salary structure, allowances, pensions, pay parity, and service conditions of Central government employees and pensioners. It also includes studying the impact on public finances and ensuring fairness and fiscal sustainability in pay revisions. The ToR acts as the foundation document of any pay commission.

According to an official notification, the Commission while making the recommendations will keep in view the following:

i. The economic conditions in the country and the need for fiscal prudence;

ii. The need to ensure that adequate resources are available for developmental expenditure and welfare measures;

iii. The unfunded cost of non-contributory pension schemes;

iv. The likely impact of the recommendations on the finances of the State Governments which usually adopt the recommendations with some modifications; and

v. The prevailing emolument structure, benefits and working conditions available to employees of Central Public Sector Undertakings and private sector.

When Will 8th Pay Commission Submit Its Recommendations To Govt?

“The 8th Pay Commission will make its recommendations within 18 months of the date of its constitution. It may consider, if necessary, sending interim reports on any of the matters as and when the recommendations are finalised," according to the notification.

It means the 8th CPC must submit the recommendations by April 2027. However, it is up to the Commission how early it submits the recommendations. After the recommendations are submitted, the government will review and accept and then implement the pay commission to revise salaries of the central government employees.

The 8th Central Pay Commission will be a temporary body. The Commission will comprise of one Chairperson; One Member (Part Time) and one Member-Secretary. Justice Desai will be the chairperson of the 8th Pay Commission. Prof. Pulak Ghosh has been appointed as a part-time member and Pankaj Jain as the member secretary.

8th Pay Commission: How Much Will Central Govt Employees' Salaries Rise?

According to research reports by Kotak Institutional Equities and Ambit Capital, the fitment factor, which is the key multiplier used for revising central government salaries, could range between 1.8 and 2.46 under the 8th Pay Commission.

Kotak has projected a fitment factor of 1.8, which would raise the basic pay of Level 1 employees (such as peons and attendants) from Rs 18,000 to Rs 32,400. While this translates to an 80% jump in basic pay, the actual or effective salary increase will be lower since the Dearness Allowance (DA) will be reset to zero once the new pay structure is implemented, a standard practice whenever a new Pay Commission is rolled out.

Currently, with DA at 58%, the entry-level salary, including HRA and other allowances, stands around Rs 29,000 per month, implying an effective hike of roughly 13% under Kotak's estimate.

Ambit Capital estimates that a fitment factor of 1.82 could lead to an effective hike of about 14%, while a median-case factor of 2.15 could push the increase to around 34%. In the upper range, a fitment factor of 2.46 could result in a 54% rise in basic pay.

Here's how the basic pay for Level 1 employees may change under different fitment factor scenarios:

1.82×: Rs 18,000 → Rs 32,760

2.15×: Rs 18,000 → Rs 38,700

2.46×: Rs 18,000 → Rs 44,280

However, these projections apply only to basic pay. Once allowances like DA, HRA, and Transport Allowance are adjusted, the net increase in take-home pay will likely be lower than the headline figures suggest.

8th Pay Commission To Also Review Bonuses, Gratuity, and PLIs

Apart from salaries, the pay panel will also review the bonuses, gratuity and performance-linked incentives for central government employees, and submit its recommendations for any revisions.

Source: News18
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