Latest news with #KotakInstitutionalEquities
India.com
12 hours ago
- Business
- India.com
8th Pay Commission BIG update: When will 8th CPC come into effect, how much salary will increase? Key details revealed
8th Pay Commission BIG update: When will 8th CPC come into effect, how much salary will increase? Key details Revealed Central government employees are eagerly waiting for the 8th Pay Commission to be implemented. Everyone is hoping that it will bring a big increase in their salaries. Now, a new report has come out that answers some important questions like when the 8th Pay Commission might be rolled out and how much salary hike can be expected. According to a report in Kotak Institutional Equities, the 8th Pay Commission may be implemented by the end of 2026 or early 2027. Right now, the government is still working on setting the terms of reference, which means deciding the rules and responsibilities of the commission. The commission itself hasn't been formed yet, and the name of the chairperson (head of the commission) has also not been announced. However, it is expected that the government may make an announcement about this soon. How much can the salary increase? Under the 8th Pay Commission, a big salary hike is expected for central government employees. According to the report: The basic salary may increase by 30 per cent to 34 per cent. The minimum basic pay, which is currently Rs. 18,000, could go up to around Rs. 30,000. The fitment factor (used to calculate revised salaries) is expected to be 1.8, which will give employees a real benefit of around 13 per cent in take-home pay. How will 8th Pay Commission impact the government's expenses? The 8th Pay Commission may have an impact of 0.6 per cent to 0.8 per cent on India's GDP. The government may have to bear an additional burden of Rs. 2.4 to Rs. 3.2 lakh crore due to salary increases. As salaries go up, spending power of employees will rise which will lead to higher demand in sectors like automobiles, consumer goods, and other daily-use items. What about savings and investments? There could be an additional increase of Rs. 1 to Rs.1.5 lakh crore in savings, especially in stocks, fixed deposits, and other investment options. The salary hike will benefit around 33 lakh government employees and a large number of pensioners. Among them, Grade C employees (lower salary bracket) are expected to benefit the most.
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Business Standard
16 hours ago
- Business
- Business Standard
Foreign Investors pump $1.4 bn into India-ETFs dominate, Active funds lag
India emerged as one of the top destinations for foreign capital in June 2025, recording net inflows of $1.4 billion into listed funds, marking the second consecutive month of positive fund flows. The surge was led by Exchange-Traded Funds (ETFs), even as traditional active funds continued to bleed assets., as per data analysed by Kotak Institutional Equities. According to data from Kotak Institutional Equities (KIE), the ETF segment alone attracted $2.4 billion in June, effectively offsetting the $1 billion in outflows from actively managed non-ETF funds. The growing investor tilt toward passive vehicles is reshaping foreign portfolio trends in India and other emerging markets. India was the second-highest recipient of foreign capital among emerging markets in June, trailing only South Korea ($1.9 billion). Other major inflow recipients included Brazil ($1.2 billion) and Taiwan ($1 billion). China stood out as the only major market to report net outflows, with investors pulling out $36 million, highlighting continued caution around the world's second-largest economy. Key Highlights: Net Inflows into Listed Funds: India-focused listed funds recorded inflows of $1.4 billion in June. This was driven by ETF inflows of $2.4 billion, which outweighed the $1 billion in outflows from non-ETF (actively managed) funds. India-Dedicated Funds: These funds saw total net inflows of $726 million, with $633 million coming from ETFs and $93 million from non-ETFs. GEM Funds: Global Emerging Market (GEM) funds also contributed to the inflow trend, adding $563 million, again led by ETF inflows of $1.3 billion offset by $727 million in non-ETF outflows. Emerging Market Trends: India was among the top beneficiaries in emerging markets, attracting $1.4 billion, second only to South Korea ($1.9 billion). Other key markets like Brazil and Taiwan saw inflows of $1.2 billion and $1 billion, respectively. China remained an outlier with modest outflows of $36 million, continuing its recent trend of investor caution. Country Allocations: India's allocation within Asia ex-Japan funds declined slightly to 16.3% in June from 16.4% in May. Within GEM funds, India's weight slipped to 18.7% from 19%, reflecting cautious rebalancing despite the inflows. ETF allocations remained stable while non-ETF allocations declined marginally, suggesting a stronger bias toward passive investing. As of June 2025, the total foreign portfolio investor (FPI) assets under custody (AUC) in India stood at $865 billion. The United States remains the largest source of FPI flows into India, with significant contributions from sovereign wealth funds, mutual funds, and pension funds. "Listed funds witnessed inflows for the second consecutive month. The inflows were driven by ETFs, which attracted US$2.4 bn, offset by non-ETF outflows of US$1 bn. GEM funds saw US$563 mn of inflows, led by ETF inflows of US$1.3 bn, offset by US$727 mn of non-ETF outflows. India-dedicated funds witnessed inflows of US$726 mn (US$633 mn of ETF inflows and US$93 mn of non-ETF inflows). Listed emerging market fund flows were positive for most countries, except for China. South Korea, India, Brazil and Taiwan saw inflows of US$1.9 bn, US$1.4 bn, US$1.2 bn and US$1 bn,respectively. China witnessed outflows of US$36 mn," said Sanjeev Prasad of Kotak Institutional. These inflows come despite ongoing global macroeconomic uncertainty. Investors appear to be re-allocating capital to markets with stronger growth prospects like India, especially through low-cost ETFs. Meanwhile, active fund managers seem to be taking a more cautious approach, leading to sustained non-ETF outflows. With ETF momentum staying strong and geopolitical concerns elsewhere, India could continue benefiting from global asset reallocation trends in the coming months.
News18
a day ago
- Business
- News18
8th Pay Commission: Minimum Basic Pay Likely Rs 30,000, Not Rs 51,000, Says New Report
Around 50 lakh central government employees and 65 lakh pensioners who were hoping for a major hike in basic pay might be in for a disappointment. A new analysis by Kotak Institutional Equities has thrown cold water on the widespread expectation that the minimum basic salary would triple under the 8th Pay Commission. (News18 Hindi) The key figure here is the fitment factor, the multiplier used to convert current salaries to the revised pay structure. While the 7th Pay Commission used a factor of 2.57, the 8th Pay Commission is now expected to apply a more conservative multiplier of 1.8. That would lift the base salary from Rs 18,000 to Rs 30,000, not the Rs 51,000 many employees were hoping for. Employees may be shocked by this new possibility, the report states bluntly. (News18 Hindi) Even this limited increase won't happen anytime soon. Though the 8th Pay Commission was formally announced in January 2025, the Terms of Reference (ToR) haven't been finalised, nor have commission members been appointed. According to Kotak's timeline, the commission's report will take 18 months, followed by another 3 to 9 months for government approval and implementation. That means employees shouldn't expect any salary revision before late 2026 or early 2027. (News18 Hindi) Despite the restrained hike, implementing the 8th Pay Commission is expected to cost the exchequer between Rs 2.4 lakh crore to Rs 3.2 lakh crore, which is 0.6% to 0.8% of GDP, according to the report. The lion's share of this benefit will go to Grade C employees, who make up 90% of the central government workforce. (News18 Hindi) Historically, pay commission hikes have boosted sectors like automobiles, consumer goods, and real estate. This time too, a similar trend is expected. Kotak projects that the revised salaries could drive additional savings of Rs 1 to Rs 1.5 lakh crore, with increased investments in stock markets, bank deposits, and physical assets. (News18 Hindi) On July 21, 2025, Minister of State for Finance Pankaj Chaudhary confirmed in Parliament that the groundwork for the 8th Pay Commission has begun. He said the ministry has already sought inputs from key departments including Defence, Home Affairs, Personnel, and various states. (News18 Hindi) The Centre typically sets up a new pay commission every decade to adjust public sector salaries and pensions in line with inflation and rising costs. The 7th Pay Commission came into effect in 2016. The 8th will likely land right on cue, but with far more tempered expectations. (News18 Hindi)
Time of India
2 days ago
- Business
- Time of India
8th Pay Commission: What could be the expected salary hike, fitment factor, and implementation date? Here's what a new report says
8th Pay Commission: Expected salary revisions 8th Pay Commission: Implementation expected to follow past timelines Impact on government finances and GDP Live Events You Might Also Like: 8th Pay Commission good news: Govt starts discussions on salary hike; check expected basic pay and dearness allowance Previous pay commission effects Consultations underway You Might Also Like: Why 8th Pay Commission may end up disappointing government employees and pensioners 8th Pay Commission: Expected salary hike Dearness allowance mechanism to remain in place Previous CPC set benchmark for revisions (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The 8th Central Pay Commission (CPC) is expected to be implemented by late 2026 or early 2027, according to a report by Kotak Institutional Equities. The government has announced the commission in January 2025 but is yet to finalise the Terms of Reference (ToR) or appoint its estimates that the minimum salary could rise from ₹18,000 to about ₹30,000, reflecting a fitment factor of around 1.8. This would lead to a real increase of nearly 13% in pay for central government employees affected by the revision. A total of around 3.3 million central employees, mostly from Grade C category, are likely to benefit the most. Grade C workers make up nearly 90% of the central government timeline for the 8th CPC is expected to follow the pattern of previous commissions. The 6th and 7th CPCs took around 1.5 years to complete their reports. After that, the government took another 3 to 9 months to implement the recommendations post Cabinet approval. Kotak said, "The 8th CPC is unlikely to be implemented before late 2026 or early 2027."The estimated financial burden of the new pay commission could range between ₹2.4 lakh crore and ₹3.2 lakh crore, or about 0.6–0.8% of India's GDP. While this could add pressure to the fiscal budget, past pay revisions have shown temporary positive effects on the noted that the pay hike may give a brief push to consumption and savings. 'We expect the 8th CPC to provide a temporary boost to consumption and savings,' the firm said. The impact is expected to be visible in sectors like automobiles and consumer staples. However, such gains have typically been firm also said that the revised pay structure may encourage more savings in both physical and financial assets such as equities and bank deposits. Kotak estimates that the pay revision could lead to incremental savings of ₹1–1.5 lakh last major revision, the 7th CPC, combined with the One Rank One Pension scheme, added about two percentage points to India's GDP growth in FY17. While similar growth is not guaranteed this time, Kotak believes the overall economic impact will still be significant, particularly in the short government has not shared further updates on the 8th CPC beyond its announcement in January 2025. Until the ToR and commission members are finalised, the process remains in its early per a report last week, the Ministry of Finance has started holding early consultations with major stakeholders to set up the 8th Central Pay Commission. These talks include departments such as Defence, Home Affairs, and Personnel and Training, along with state governments. These discussions are intended to collect feedback ahead of the official notification of the a written reply in Parliament, Minister of State for Finance Pankaj Chaudhary said, 'Inputs have been sought from major stakeholders, including Ministry of Defence, Ministry of Home Affairs, Department of Personnel & Training and from states.'Chaudhary also told the Lok Sabha that the appointment of the chairperson and other commission members will take place once the 8th CPC is formally constituted. No appointments have been made so upcoming CPC may propose a fitment factor of 1.8 for salary revision. This would be lower than the 2.57 factor adopted in the 7th Pay Commission. While a fitment factor of 1.8 implies an 80% increase in the basic pay structure, the real impact on net salary would be reduced because the existing dearness allowance (DA)—currently around 55%—would reset to zero under the new the fitment factor of 1.8 is accepted, the minimum basic salary may increase from ₹18,000 to around ₹32,000. But after adjusting for current allowances, the actual increment would amount to an estimated 13%. For example, the present ₹18,000 base salary includes a DA component of about ₹9,900. Similarly, a base salary of ₹50,000 may be revised to ₹90,000, but since DA of around ₹27,500 is already included, the effective rise would be twice-yearly revision of dearness allowance is expected to continue under the 8th CPC. The DA, based on the Consumer Price Index for Industrial Workers, protects salaries and pensions from inflation. At present, revisions take place in January and July. By the time the new pay structure is introduced, the DA is projected to exceed 60% of the existing basic 7th Pay Commission, headed by Justice A K Mathur, recommended an overall rise of 23.55% in salaries, pensions, and allowances. The government approved most of the proposals with effect from January 1, 2016. The structure and impact of the 8th CPC are likely to be shaped by current economic conditions and inflation, but will follow broadly the same process, beginning with the collection of inputs from relevant departments and states.
News18
4 days ago
- Business
- News18
8th Pay Commission May Bring 13% Salary Hike For Central Government Employees: Kotak
The 8th Pay Commission may not be implemented before late 2026 or early 2027, says Kotak Institutional Equities. 8th Pay Commission: Central government employees are likely to receive a nearly 13% real salary hike after the 8th Pay Commission, according to a report by Kotak Institutional Equities, adding that the panel may not be implemented before late 2026 or early 2027. The brokerage firm also said a fitment factor of 1.8 might be adopted, and the minimum pay level is likely to increase from Rs 18,000 to Rs 30,000 per month. The fitment factor is a multiplier used to revise the basic salary of central government employees based on recommendations by a Pay Commission; it adjusts the existing pay structure to arrive at the new pay levels. However, the pay hike may not come anytime soon. Kotak said the government has yet to define the Terms of Reference (ToR) or appoint members to the new commission. It added that the 8th CPC is unlikely to be implemented before late 2026 or early 2027. The 6th and 7th CPCs took roughly 1.5 years to prepare their reports after being set up, followed by a 3-9 month implementation window after the Cabinet approval. The 8th Pay Commission was announced in January 2025. However, its ToR and members are yet to be announced. 8th Pay Commission Fiscal Cost Roughly 3.3 million central government employees would be directly impacted, with Grade C staff, who make up nearly 90% of the workforce, benefiting the most. 8th Pay Commission: Impact On Discretionary Spending Kotak said previous CPCs, especially the 7th, led to temporary surges in discretionary spending and positively impacted sectors such as automobiles and consumer staples. However, these effects generally fade within a year. RBI data cited in the report shows that the 7th CPC and the implementation of the One Rank One Pension (OROP) scheme added around two percentage points to GDP growth in FY17. On the savings front, Kotak expects a portion of the extra income from the 8th CPC to flow into both physical and financial assets — including equities and bank deposits. The brokerage estimates that incremental savings of Rs 1-1.5 lakh crore could result from the pay hike cycle. While the 8th Pay Commission is expected to deliver a notable one-time boost to consumption and savings, Kotak reiterates that its rollout remains at least 18 months away. 8th Pay Commission: 'Inputs Sought From Stakeholders' Meanwhile, the finance ministry on July 21 told Parliament that the central government has geared up to expedite the process of constituting the 8th CPC by taking consultations with key stakeholders including states, the Ministry of Defence, the Ministry of Home Affairs, and the Department of Personnel and Training. In a written reply to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said, 'Inputs have been sought from major stakeholders, including Ministry of Defence, Ministry of Home Affairs, Department of Personnel & Training and from States." Asked on the implementation timeline, Chaudhary said: 'The implementation would be taken up once the recommendations are made by the 8th CPC and are accepted by the Government." Every 10 year, the government revises the basic salary of its employees and pensions of pensioners in align with the rising cost of living and other expenses. In January, the Cabinet approved setting up the 8th Pay Commission to revise salaries of nearly 50 lakh central government employees and allowances of about 65 lakh pensioners. tags : 8th Pay Commission view comments Location : New Delhi, India, India First Published: News business » economy 8th Pay Commission May Bring 13% Salary Hike For Central Government Employees: Kotak Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
