The Union Cabinet, headed by Prime Minister Narendra Modi, approved the Terms of Reference (ToR) for the 8th Pay Commission in October 2025, raising expectations of salary and pension revisions for central government employees and retirees.
The commission is tasked with revising pay, pensions, and allowances using a key multiplier known as the fitment factor, which is typically aligned with inflation and economic realities.
How the Fitment Factor Will Be Determined
The 8th Pay Commission will assess multiple factors including inflation trends, real wage erosion, fiscal capacity, and the government’s compensation philosophy, aiming to reset salaries while maintaining sustainable public finances.
The fitment factor is designed to reflect rising living costs and ensure the government can retain talent across essential services. With nearly a decade since the last major revision, the 8th Pay Commission needs to balance household expenditure increases with economic sustainability.
Expected Fitment Factor and Impact
Early projections suggest the fitment factor for the 8th Pay Commission could range from 1.83 to 2.57, potentially boosting salaries and pensions for roughly one crore central government employees and retirees.
For reference, the 7th Pay Commission used a fitment factor of 2.57, applied only to basic pay. Dearness allowance (DA) is expected to be reset to zero at the start of the new commission, following the historical practice.
If implemented, the upcoming revisions could lead to a significant increase in take-home pay, providing relief against rising inflation and enhancing purchasing power for government employees nationwide.
Disclaimer: The information provided in this article is for informational and educational purposes only. The 8th Pay Commission fitment factor and related salary/pension figures are based on early projections and expert opinions. Official decisions, notifications, and figures from the Government of India may vary. Readers should not make financial or career decisions solely based on this content and are advised to refer to official government sources for final details.
