8th Pay Commission hopes dim as basic salary likely to rise only to Rs 30,000

Central government employees and pensioners expecting a significant salary hike under the 8th Pay Commission may be in for a disappointment. Contrary to widespread speculation of basic pay increasing from Rs 18,000 to Rs 51,000, a 183% jump,, experts now suggest a far more modest hike.

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According to a recent analysis by Kotak Institutional Equities, the basic salary may only increase to Rs 30,000. This estimate considers a potential fitment factor of 1.8, which is lower than the 2.57 applied in the 7th Pay Commission. The hike, though lower than expected, is still projected to impose a financial burden of Rs 2.4 lakh crore to Rs 3.2 lakh crore on the government, most of which will go to Grade C employees, who make up over 90% of the central government workforce.

The implementation of the 8th Pay Commission will not be immediate. Though the groundwork has begun and the Finance Ministry has sought inputs from key departments like Defence and Home Affairs, the Terms of Reference and appointment of members are still pending. Once formed, the commission will take about 18 months to submit its report. Post-approval, it may take another 3 to 9 months for execution, pushing any salary revisions likely to late 2026 or early 2027.

Historically, such salary hikes have spurred economic boosts in sectors like real estate, automobiles, and consumer goods, and similar ripple effects are expected this time as well.