8th CPC 13% Likely Salary Hike , Fitment Factor Lower Than 7th CPC, Says Kotak Report

Central government employees are in for a pay bump—but it might feel a bit underwhelming compared to the last one.

According to a recent report by Kotak Institutional Equities, the 8th Pay Commission is expected to deliver a 13% effective salary hike, slightly lower than the 14.3% increase under the 7th Pay Commission.

Lower Fitment Factor, Lower Real Hike

At the heart of this is the fitment factor, the key multiplier that determines new salaries. The 8th Pay Commission is likely to recommend a fitment factor of 1.8, significantly below the 2.57 used in the 7th Pay Commission—a drop of nearly 30%.

While a 1.8 factor means the basic salary could technically jump by 80%, the real raise feels smaller because dearness allowance (DA), which currently adds 55% to the basic pay, would be reset to zero after the revision.

What Does This Mean for Your Paycheck?

• If you're earning the minimum basic salary of Rs 18,000, your new pay could climb to around Rs 32,000. But with the current DA (Rs 9,900) included, your take-home pay already stands at Rs 27,900—so the real gain is just about 13%.

• Similarly, someone with a basic salary of Rs 50,000 would see it jump to Rs 90,000, but when you factor in existing DA (Rs 27,500), the net gain again is far less dramatic.

What Employees Want

Representatives from the National Council-Joint Consultative Machinery, the official staff forum, are pushing for a fitment factor at least equal to 2.57—but they’ve hinted that the final figure may fall short.

Bigger Costs, Bigger Impact

The expected fiscal burden? Between Rs 2.4 to 3.4 lakh crore, nearly triple the cost of implementing the 7th Pay Commission back in 2017. But with 90% of central government employees in Grade C, this pay revision could fuel consumption at the grassroots level, giving a boost to the economy.

In a Nutshell:

• Expected salary hike: ~13%

• Fitment factor: Likely 1.8 (vs. 2.57 earlier)

• DA reset: Yes (currently 55%, expected to exceed 60% by implementation)

• Implementation reach: 3.3 million employees

• Fiscal impact: Rs 2.4–3.4 lakh crore

The 8th Pay Commission is coming—and while it brings more money to your bank account, don’t expect a windfall.