Lagatar24 Desk
New Delhi: As inflation continues to erode monthly budgets, the announcement of the 8th Pay Commission has brought hope to central government employees and pensioners. The Union Cabinet approved the commission on Thursday to revise salaries and pensions, with Union Minister Ashwini Vaishnaw confirming its establishment is on the horizon.
What Can Pensioners Expect?
The 8th Pay Commission, set to replace the 7th Pay Commission recommendations in effect since January 1, 2016, is expected to bring significant pension hikes. Experts suggest the revision may introduce a fitment factor between 2.5 and 2.86, potentially increasing pensions by 186% in some cases.
•Krishnendu Chatterjee, Vice President at TeamLease, anticipates pensions rising from the current ₹9,000 to a range of ₹22,500–₹25,200.
•Sumit Dhar, Partner at Fox Mandal & Associates, noted that if a 2.86 fitment factor is adopted, both minimum salaries and pensions could see a dramatic jump.
•Ritika Nayyar, Partner at Singhania & Co., estimates average pension hikes between 20% and 30%, depending on economic conditions and budget constraints.
Fitment Factor: The Key Driver
The fitment factor, a multiplier determining revised basic pay and pensions, is pivotal in pension hikes. For example, a fitment factor of 2.5 would raise a basic pension of ₹30,000 to ₹75,000. Previous commissions, such as the 7th, implemented a fitment factor of 2.57, resulting in a 23–25% pension increase.
Additional Benefits for Pensioners
•Dearness Relief (DR): The DR component, reset to zero under the new structure, will be adjusted periodically to account for inflation, ensuring pensions remain adequate over time.
•Senior Allowances: Enhanced allowances for senior pensioners may be introduced to offset higher costs faced by retirees.
Challenges Ahead
While expectations are high, experts caution that final decisions on pension hikes depend on the commission’s recommendations, which consider economic conditions and government budget constraints. The actual percentage increase will only be confirmed after the commission submits its report and the government approves its proposals.
The 8th Pay Commission represents an opportunity to align pensions with rising living costs, ensuring financial stability for retirees while addressing employee expectations for equitable post-retirement benefits.
