8th Pay Commission: Employee unions urge higher basic pay, fitment factor

The 8th Central Pay Commission has concluded its memorandum submission phase. The panel will now review crucial employee demands, including a 3.15 fitment factor, minimum pay hikes, and the restoration of the Old Pension Scheme for 1.24 crore beneficiaries

New Delhi: The Eighth Central Pay Commission has completed the memorandum submission phase, on June 15, and it is set to examine demands from central government employees and pensioners ahead of its final recommendations.

The commission, which began operations after the government approved its terms of reference in October 2025, has about 10 months remaining to finalise proposals. The commission is expected to recommend revisions to salaries, pensions and allowances for around 55 lakh serving central government employees and about 69 lakh pensioners, according to multiple reports.

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Central employee unions and associations focused their memoranda submissions for a higher fitment factor, a substantial increase in the minimum basic pay, multiple reports said.

Employee bodies also demanded a restoration of the Old Pension Scheme (OPS) in place of the National Pension System (NPS). They also sought improvements in allowances such as HRA, risk pay, bonuses, leave benefits and other retirement perks.

The government announced a 2 per cent hike in Dearness Allowance (DA) and Dearness Relief (DR) in January 2026, taking the overall rate to 60 per cent. The Centre announces the dearness allowance twice in a calendar year and the DA effective from July, is typically announced in September and rarely in October.

It will be determined using the All India Consumer Price Index for Industrial Workers (AICPI‑IW) data of May and June 2026.

The 8th Pay Commission has already held consultations in Delhi, Ladakh, Jammu & Kashmir, Hyderabad, Telangana and Maharashtra, and conducted its first interaction with employee associations in Uttarakhand. Further visits are scheduled to Lucknow, Bhubaneswar and Kolkata till July.

The salary increase will hinge on the fitment factor the government adopts which analysts expect to exceed 2.5, while some employee associations have sought a fitment factor of 3.15.

Fitment factor is a multiplier that is used to revise salaries, based on factors such as cost of living and inflation and is then applied to existing basic pay to calculate new pay in a pay commission.