The current minimum basic pay of Rs 18,000 could rise to about Rs 30,000 under the 8th Pay Commission structure.
The experts expect the fitment factor to be around 1.8
As discussions around the 8th Central Pay Commission (CPC) gather pace, most attention is currently focused on the expected fitment factor and the overall percentage increase in salaries. While these numbers help explain how much pay may rise on paper, they do not fully capture what truly matters to employees, the real increase in pay.
Real pay hike refers to the increase in salary after adjusting for inflation. In simple terms, it shows how much purchasing power actually improves. For instance, according to the report from Ambit Institutional Equities, under the 7th Pay Commission (Jan’16-Dec’25), there was a modest salary hike of ~14%, meaning salaries rose by that margin after accounting for rising prices.
WHAT IS REAL PAY AND WHY IT MATTERS
For central government employees and pensioners, the impact of inflation is partly offset by dearness allowance (DA) and dearness relief (DR). These are revised regularly to protect incomes from the rising cost of living.
However, even with DA and DR in place, each Pay Commission delivers a one-time real improvement in salaries. This real gain varies widely from one commission to another and offers a clearer picture of how much better off employees actually become.