How much gratuity will increase with 8th Pay Commission?
The central government has recently approved the formation of the 8th Pay Commission, which is an important step to increase the salaries, allowances and gratuity of government employees and pensioners. This decision will benefit about 49 lakh central government employees and 65 lakh pensioners.
Why is the 8th Pay Commission necessary?
This commission will mainly recommend the salary and pension of government employees, which is in line with the current economic conditions and inflation rates. The term of the previous 7th Pay Commission is ending in 2026, so this step is necessary.
Increase in gratuity
The maximum limit of gratuity is expected to increase under the 8th Pay Commission. Currently this limit is 20 lakhs, which can be increased to 25 to 30 lakhs. Gratuity is calculated on the basis of the basic salary and dearness allowance of the last month. For example, if an employee's basic salary is 18,000 and he works for 30 years, his gratuity will be around 4.89 lakhs. But according to the new fitment factor, if it increases from 2.57 to 2.86, then the gratuity figure can reach around 12.56 lakhs.
Increase in salary and allowances too
The 8th Pay Commission is likely to increase the salary of central employees by 25 per cent to 35 per cent. Apart from this, allowances like Dearness Allowance (DA), house Rent Allowance (HRA) and Travel Allowance (TA) are also expected to increase. Retirement benefits for pensioners can also increase by 30 per cent.
Effect of fitment factor
The effect of fitment factor in the 8th Pay Commission will also be significant. In the 7th Pay Commission, the fitment factor was 2.57, due to which the minimum basic salary increased from 18,000 to 46,620. If the fitment factor increases in the new commission, the minimum basic salary can reach 51,000. This will not only directly benefit the central employees, but it will also improve the economy as it is likely to increase expenditure.
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