The government has approved the 8th Pay Commission, which will provide a salary hike for about 50 lakh employees and 70 lakh pensioners. Additionally, allowances and pension calculations will also be revised.

The government recently approved the ToR for the 8th Pay Commission, paving the way for a salary hike for about 50 lakh central government employees and 70 lakh pensioners. The committee will submit its final report in 18 months, meaning the new salary hike is likely to be implemented by 2027.

The 8th Pay Commission is a temporary body. Justice (Retd) Ranjan Desai has been appointed as its chairman. A part-time member and a secretary member will work with him. An interim report may also be released if needed. The committee will also consider the country's economic condition, fiscal discipline, financial burden, and the pay gap between government and private employees.

The fitment factor, expected to be 1.8 to 2.57, is key for the basic salary hike. This means a potential salary increase of 80% to 157% for employees across different levels.

With the new pay commission, new calculations will be made for Dearness Allowance (DA), House Rent Allowance (HRA), and Travel Allowance (TA). Also, the pension amount will be increased, and pension calculations will be simplified.

After the 8th Pay Commission's report, a new Pay Matrix will be implemented. This will clarify pay levels, increments, and promotion-based changes. Overall, central government employees and pensioners will get a big salary hike in 2027.

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