Central government employees across India are eagerly awaiting the 8th Pay Commission, expected to revise salaries, pensions, and allowances. The revision will be determined by a fitment factor, a multiplier calculated based on inflation, employee needs, and government affordability. Inflation plays a critical role in determining pay revisions, as it ensures salaries remain in line with the rising cost of living.
Historical Salary Trends and Inflation Across Pay Commissions
5th Pay Commission (1997)
Implemented in 1997, the 5th Pay Commission set the minimum monthly salary at ₹2,550, with inflation around 7%. While the commission simplified pay scales and offered dearness relief, inflation gradually reduced the real value of salaries.
6th Pay Commission (2008)
The 6th Pay Commission came into effect when inflation ranged between 8-10%. The minimum pay rose to ₹7,000, a jump of ₹4,450 from the previous commission. It introduced pay bands and grade pay, creating a structural overhaul of government salaries and leading to significant increments for employees across various grades.
7th Pay Commission (2016)
The 7th Pay Commission, implemented in 2016, saw inflation around 5-6%. The minimum pay increased to ₹18,000, a rise of ₹11,000 from the 6th Pay Commission. This commission also introduced a pay matrix, revamped pension calculations, and emphasized work-life balance initiatives for government staff.
8th Pay Commission: Projections and Expectations
The 8th Pay Commission is tentatively slated for 2026. Experts project inflation at 6-7%, and according to Ambit Institutional Equities, employees could see a 30-34% salary hike. While official government notification is pending, the new pay structure is expected to reflect inflation, economic growth, and equitable compensation across all roles.
Also Read: 7th Pay Commission vs 8th Pay Commission – The Analogy
Additional Context:
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According to the Department of Expenditure, India has over 33 lakh central government employees and more than 50 lakh pensioners, all of whom will be affected by the new pay commission.
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In previous pay revisions, the government also adjusted dearness allowances (DA) based on the Consumer Price Index, which compensates for inflation. In 2025, the DA for employees was around 42% of basic pay, showing how cost-of-living adjustments continue to play a vital role.
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Pensioners benefit from revised pensions linked to the fitment factor, ensuring retirees do not face a decline in purchasing power.
Salary Structure of Central Government Employees
Government employees’ salaries comprise four key components: basic pay, dearness allowance (DA), house rent allowance (HRA), and transport allowance.
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Basic Pay: 51.5% of total income
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Dearness Allowance (DA): 30.9%
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House Rent Allowance (HRA): 15.4%
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Transport Allowance: 2.2%
The 8th Pay Commission will likely recalibrate these components, ensuring salaries remain competitive and aligned with economic realities. Experts predict the revision could have a significant impact on government expenditure, as each pay commission historically leads to billions in increased annual outlay.
Also Read: 8th Pay Commission: This may be the Fitment Factor
