8th Pay Commission: Central Govt Employees Likely To Receive Up To 19% Hike In Median Salary, Says Goldman Sachs
8th Pay Commission: Goldman Sachs in its latest note says central government employees could benefit by an additional Rs 14,000 to Rs 19,000 per month, a hike of 14-19% over their existing pre-tax median salary of Rs 1 lakh.
8th Pay Commission: Central government employees are likely to receive a hike of Rs 14,000-19,000 per month in their median salary after the implementation of the 8th Pay Commission in 2026 or 2027, according to Goldman Sachs. This is a 14-19% hike over their current median monthly salary (pre-tax) of Rs 1 lakh.
In a note on Monday, the financial services company said the 8th Pay Commission is expected to be constituted in April and its report is likely to be implemented in 2026 or 2027.
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Goldman Sachs in its broad-scenario analysis for the central government-employee cohort said, “While only for illustrative purposes, this analysis suggests the cohort could benefit by an additional Rs 14,000 to Rs 19,000 per month."
The financial services company presents three scenarios of the salary hike:
Scenario 1: If the central government decides to allocate Rs 1.75 lakh crore for the 8th Pay Commission’s implementation and 50-50 is used for salary hike and pension hike, the median salary of central government employees will rise by Rs 14,600 per month.
Scenario 2: If allocation is Rs 2 lakh crore, the median salary will be increased by Rs 16,700 per month.
Scenario 3: If the Centre allocates Rs 2.25 lakh crore, the salary hike for the employees will be Rs 18,800 per month.
Currently, the median salary of central government employees is Rs 1 lakh (before the tax), according to Goldman Sachs.
The salary hike could benefit over 50 lakh central government employees and more than 65 lakh pensioners.
In the 7th Pay Commission, the central government incurred an estimated cost of Rs 1.02 lakh crore for salary and pension hikes.
8th Pay Commission: What We Know So Far
The 8th Pay Commission has already been announced and received the Union Cabinet’s approval on January 16, 2025. However, its members, chairman, and the terms of reference (ToF) have not been decided yet. Once these are decided, the Commission will hold deliberations with stakeholders and determine the fitment factor and other modalities for the salary and pension hikes.
According to Goldman Sachs, the 8th Pay Commission is likely to be constituted in April and its report is likely to be implemented in 2026 or 2027.
According to reports, the National Council-Joint Consultative Machinery seeks a fitment factor of at least 2.57 (same as the 7th Pay Commission) or higher.
Join Consultative Machinery is a platform to resolve disputes between the central government and its employees through dialogue.
“I still believe that the fitment factor…has to be at least 2.57, or higher than that," Shiv Gopal Mishra, secretary (staff side) of the National Council-Joint Consultative Machinery, recently told NDTV Profit.
How Much Will Minimum Salary Increase For Central Govt Employees On A Fitment Factor Of 2.57?
A fitment factor of 2.57 will led to a 157 per cent salary hike for central government employees. It means that the current minimum salary of Rs 18,000 per month will increase to Rs 46,260.
It will also lead to a commensurate hike in minimum pension from Rs 9,000 per month to Rs 23,130.
The 7th Pay Commission had recommended the fitment factor of 2.57. It had led to a hike of 157 per cent in minimum salary from Rs 7,000 to Rs 18,000 for central government employees.
Earlier, there was a demand for a fitment factor of 2.86 under the 8th Pay Commission. However, former finance secretary Subhash Garg in an interview with a news channel said that the demand for a fitment factor of 2.86 is like “asking for the moon". He said fitment factor could be around 1.92.
If the fitment factor of 1.92 is approved, it will increase central government employees’ minimum salary from Rs 18,000 to Rs 34,560, a hike of 92 per cent.
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