Discussions have intensified among more than 49 lakh central government employees and about 68 lakh pensioners regarding the formation of the 8th Central Pay Commission (8th CPC) and the new pay matrix. The demands of minimum wage increase, fitment factor and revision of various allowances are being continuously raised by the employee organizations. Meanwhile, analysis of salary projections of different levels is coming out based on the probable formula of Pay Commission and the existing pay matrix data.
In the Central Civil Services Pay Matrix, 'Level-1' (previous grade pay ₹ 1800 / initial entry of Group 'D' and 'C') is considered to be the largest employee category. In the pay matrix of the 7th Pay Commission, the minimum basic pay of Level-1 starts at ₹ 18,000 and the maximum basic pay reaches ₹ 56,900 by the time it reaches Stage-40 with annual increments during the service period. After adding fitment factor, adjustment of Dearness Allowance (DA), House Rent Allowance (HRA) and Transport Allowance (TPTA) for
To understand how this net increase of 30.77% turns out, a head-to-head analysis of the existing structure of the 7th Pay Commission (which involves revision of allowances at 50%+ DA) and the probable fitment formula of the 8th Pay Commission is necessary:
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Basic Pay: The basic pay at Stage 40 of Pay Matrix Level-1 of the 7th Pay Commission is ₹ 56,900. If the probable initial fitment factor (basic pay merger) of 1.92 in the 8th Pay Commission is implemented, the new basic pay will increase to approximately ₹1,09,248 (rounded off).
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Dearness Allowance – DA: With 53% DA in 7th CPC, this amount comes to ₹30,157. With the implementation of the 8th Pay Commission, the previous DA is absorbed into the basic pay and under the new formula the DA calculation starts from zero.
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House Rent Allowance (HRA – X Class Cities): In the 7th Pay Commission, when DA crossed 50%, the HRA rate in The HRA calculated in the range of 27% to 30% of the new basic pay in the 8th CPC comes to the level of ₹29,497.
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Transport Allowance (TPTA Allowance): The current rate in high TPTA cities for Level-1 is ₹1,350 + DA (total ₹2,066), which is estimated to be around ₹4,500 as revised in the 8th Pay Commission.
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Gross salary difference: At present, including all allowances, the total gross salary at this stage comes to approximately ₹ 1,13,500, which increases by approximately ₹ 34,926 to ₹ 1,48,426 with the new formula of 8th CPC.
| Component (Allowances/Salary) | 7th Pay Commission (Current Rates) | 8th Pay Commission (Proposed Estimates) |
| Pay Level & Stage | Level-1, Stage-40 | Level-1, Stage-40 |
| Basic Pay | ₹56,900 | ₹1,09,248 (1.92 fitment) |
| Dearness Allowance (DA) | ₹30,157 (53%) | ₹0 (Beginner level) |
| House Rent Allowance (HRA – 27-30%) | ₹17,070 (30%) | ₹29,497 |
| Transport Allowance (TPTA + DA) | ₹2,066 | ₹4,500 |
| other fringe allowances | ₹7,307 | ₹5,181 |
| Total Gross Salary (Gross Monthly) | ₹1,13,500 | ₹1,48,426 |
| Net Hike %) | — | +30.77% (₹34,926) |
'Fitment Factor' plays the most important role in the determination of Pay Commission. A fitment factor of 2.57 was implemented in the 7th Pay Commission, which included a major portion of 125% DA in the then basic pay. If the DA remains between 50% to 55% at the time of formation of the 8th Pay Commission, then the scale of fitment factor is likely to be set between 1.92 to 2.15.
As soon as the basic pay goes up, all the allowances attached to it (like HRA, TPTA, Children's Education Allowance and gratuity ceiling) automatically go up to a higher level. However, along with this, the 10% monthly deduction and income tax liability under NPS or the proposed UPS (Unified Pension Scheme) will also increase proportionately.
Even though the Stage-40 figures show an attractive gross salary of ₹1.48 lakh, the same applies to senior employees who have completed 35 to 40 years of long and continuous service. The main focus of the employee unions (JCM/NC JCM) is on the entry stage (Stage 1) of Level-1, where the entry pay is currently only ₹18,000. Employees' organizations demand that the minimum starting basic pay in the 8th Pay Commission should be increased from ₹ 18,000 to at least ₹ 34,500, so that in the era of inflation, the newly appointed Class IV and Group 'C' employees can also get a respectable standard of living.