8th Pay Commission: The minimum salary in the 8th Pay Commission could go up to Rs 58,000 if this demand is accepted...

Important news has emerged regarding the 8th Pay Commission for central government employees and pensioners. Employee unions have demanded a major change in the basis for calculating the minimum wage. This demand involves increasing the family unit from 3 to 5. If this proposal is accepted, the minimum wage, fitment factor, and pension could see a significant increase.

This issue has been prominently raised in recent meetings of employee unions, where a joint memorandum is being prepared and submitted to the Pay Commission.

What is the Family Unit Issue?

In the 7th Pay Commission, the minimum wage was calculated based on three consumption units: the employee, spouse, and two children. Based on this, the minimum basic salary was fixed at ₹18,000.

Now, employee unions are demanding that in the current social and economic environment, parents are also dependents, so the family unit should be increased to 5.

If 5 units are used as the basis, the 3 to 5 ratio represents an increase of approximately 66 percent. In such a scenario, the minimum basic salary could increase from ₹18,000 to ₹54,000, or according to some estimates, to ₹58,500.

Impact on Fitment Factor and Pension
The fitment factor, which acts as a multiplier to convert the current salary to the new salary, is currently 2.57. Employee organizations are demanding that it be increased to 3 to 3.25.
If this proposal is accepted, not only will employees' salaries increase, but pensions will also increase proportionately, as pensions are 50 percent of the final basic salary.
Other Key Demands
Several other demands are also being discussed in the meetings, including:

Increasing annual pay increments from 3 percent to 7 percent

Reinstatement of the old pension scheme

Reforms in the promotion policy and a minimum of five promotions

Revisions in house rent allowance, dearness allowance, and other allowances

Increasing the leave encashment limit from 300 days to 400 days

Employee organizations say that the 3-unit model is now outdated given rising inflation and the cost of living.

How far has the process progressed?
The 8th Pay Commission was announced in January 2025. Its terms of reference were later released, but employee organizations say that several key demands were not included in it.

Currently, a joint memorandum is being prepared by the employee side, which will be submitted to the Pay Commission Chairperson, Justice Ranjana Prakash Desai. The final decision will depend on the Commission's recommendations and the central government's approval.

Is this decision final?
It's important to clarify that the proposal to increase the family unit to five is currently only at the demand stage. Whether it will be accepted or not will depend entirely on the decision of the Pay Commission and the government. If approved and implemented from January 1, 2026, a historic increase in salaries and pensions is possible. However, the final figures, implementation date, and payment of arrears will be decided later.

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