The Indian government has initiated the process to set up the 8th Central Pay Commission, scheduled to revise the salaries of central government employees after the 7th Pay Commission concludes its term in December 2025. This move, announced in January 2025, has triggered widespread discussions among employees and policy experts, especially around the fitment factor and whether the Dearness Allowance (DA) will be merged with basic pay—just like in previous pay commissions.
Understanding these two components is essential to anticipating how future salary structures might evolve under the new pay regime.
What Is the Fitment Factor?
The fitment factor is a standard multiplier used to recalibrate the basic pay of government employees when a new pay commission is implemented. It serves two main purposes:
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Standardization: It ensures uniform salary hikes across various pay bands.
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Inflation Adjustment: It incorporates compensation for inflation already covered through DA.
For instance, during the 7th Pay Commission, a fitment factor of 2.57x was used. This wasn’t random—it was calculated by merging the existing basic pay, the DA (which was 125% at the time), and then adding a real increase of around 14.22%.
Role of Dearness Allowance (DA) in Salary Restructuring
DA is a critical allowance designed to cushion the impact of inflation on employees’ purchasing power. Over time, as DA accumulates, it becomes substantial enough to warrant a merger with basic pay before a pay commission proposes any salary hike.
This merging simplifies the salary structure and forms the foundation for applying the fitment factor.
Historical Precedent
In the 5th, 6th, and 7th Pay Commissions, the dearness allowance was either explicitly or implicitly absorbed into the basic pay before revising the salary:
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5th CPC (1996): DA was ~74%, merged into basic pay with a fitment factor of 1.86.
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6th CPC (2006): DA had reached ~115%. The merger was implicit, and a fitment factor of 1.86 (plus grade pay) was applied.
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7th CPC (2016): DA stood at ~125%. A fitment factor of 2.57x was used post-merger.
How the 8th Pay Commission Might Approach Pay Revision
Given the consistent approach followed in previous commissions, it’s highly likely that the 8th Pay Commission will also merge DA with basic pay before calculating the final revised salaries.
Let’s look at a possible example to illustrate the likely formula under the 8th CPC:
Hypothetical Salary Calculation
| Component | Amount (₹) |
|---|---|
| Basic Pay (current) | 10,000 |
| DA @ 125% | 12,500 |
| Subtotal (Basic + DA) | 22,500 |
| Approx. Real Hike @ 14.22% | 3,199.5 |
| Total Revised Pay | 25,699.5 (rounded to 25,700) |
| Fitment Factor | 2.57 |
This example follows the methodology from the 7th CPC, and the new commission is expected to follow a similar route, although the exact percentages may differ based on inflation and economic conditions.
Comparison: Fitment Factors and DA Across Pay Commissions
| Pay Commission | DA at Merger Time | Fitment Factor Used |
|---|---|---|
| 5th CPC (1996) | ~74% | 1.86 |
| 6th CPC (2006) | ~115% | 1.86 (plus grade pay) |
| 7th CPC (2016) | ~125% | 2.57 |
Implications for Government Employees
The approach of merging DA into basic pay before applying a fitment factor has significant implications:
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Predictable Pay Hikes: This method offers a structured and transparent path for salary increases.
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Benefit of DA Accumulation: Employees indirectly benefit from sustained DA increases over the years.
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Anticipation of Real Hike: Alongside inflation adjustments, employees can expect a modest “real increase” in pay—historically around 14% or higher.
Factors Likely to Influence the 8th CPC Recommendations
Several dynamics will shape the final recommendations of the 8th Pay Commission:
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Current DA Percentage: As of early 2025, the DA is nearing 50%, a key threshold historically used to trigger mergers.
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Inflation Trends: Ongoing inflation trends will influence both DA calculations and real wage hikes.
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Fiscal Capacity: The government’s fiscal space and economic conditions will determine how generous the fitment factor can be.
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Public Sector Demands: Growing employee expectations could pressure the commission to recommend a higher-than-expected fitment factor.
Frequently Asked Questions
Q1. When will the 8th Pay Commission be implemented?
The 8th Pay Commission is expected to be implemented after the 7th CPC’s term ends in December 2025, with final recommendations likely to be announced in early 2026.
Q2. What is the expected fitment factor under the 8th CPC?
While the exact number isn’t confirmed, expectations range from 3.0 to 3.68, depending on the final DA percentage and economic assessments.
Q3. Will DA be merged into basic pay before applying the fitment factor?
Based on past practices, it is very likely that DA will be merged with basic pay before applying the new fitment factor.
Q4. How does the fitment factor benefit employees?
The fitment factor standardizes and amplifies salary hikes across all levels, ensuring that inflation and DA are fully considered in the revised pay structure.
Q5. Will pensioners also benefit from the 8th CPC revisions?
Yes, typically, pensioners see parallel benefits in line with the new pay structures, adjusted according to applicable pension formulas.
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Kishan is a knowledgeable writer specializing in agriculture and the latest government job recruitments, delivering clear and insightful content to inform and empower readers.