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News18
5 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.
Time of India
5 days ago
- Business
- Time of India
8th Pay Commission: What is the fitment factor; how it may impact salary hike of central government employees
8th Pay Commission news: As the central government has begun consultations with key stakeholders, including the Ministry of Defence, Ministry of Home Affairs, Department of Personnel and Training, and state governments, as part of the process to constitute the 8th Central Pay Commission (CPC) to revise pay structures for nearly 50 lakh central government employees and 62 lakh pensioners, attention is now focused on a key component of the salary calculation — the fitment factor. According to an ET report, the fitment factor plays a pivotal role in determining how much a government employee's basic pay will rise under a new pay commission structure. What is the fitment factor? The fitment factor is a numerical multiplier used to calculate revised salaries. It is applied to the existing basic pay to arrive at the new basic salary under the Pay Commission. A higher fitment factor results in a proportionally higher salary. For example, under the 7th Pay Commission, the fitment factor was 2.57 — meaning the basic pay was increased by 2.57 times to arrive at the new structure. If the 8th Pay Commission recommends a higher figure, the salary hike could range between 30% and 34%, as per initial estimates cited in reports. However there's no official word yet on the new multiplier, any upward revision will significantly impact take-home pay and pension calculations. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like American Investor Warren Buffett Recommends: 5 Books For Turning Your Life Around Blinkist: Warren Buffett's Reading List Undo Why it matters for take-home pay A higher basic salary also boosts allowances that are linked to it, such as dearness allowance (DA), house rent allowance (HRA), and travel allowances. This means a higher fitment factor not only increases base pay but also enhances total take-home earnings. When will the 8th Pay Commission be implemented? While there is no official notification yet, 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.' He added that the chairperson and members of the 8th CPC will be appointed once the commission is formally notified. The Union Cabinet had approved the setting up of the 8th Pay Commission in January 2025, aiming to revise the pay structure of nearly 50 lakh central government employees and the allowances of about 65 lakh pensioners, according to a PTI report. Responding to a query on when the revised pay scales would be implemented, Chaudhary clarified: 'The implementation would be taken up once the recommendations are made by the 8th CPC and are accepted by the government.' Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
News18
7 days ago
- Business
- News18
8th Pay Commission: Centre Expedites Process, But Salary Hike May Be Lower Than Expected
The Central government is speeding up the 8th Pay Commission process, consulting key stakeholders. But a new report dashes employees' hopes for a higher revision of salary. 8th Pay Commission Update: After an unexpected delay in the constitution of the 8th Pay Commission since the announcement in January 2025, the Central government has geared up to expedite the process by taking consultations with key stakeholders including states, the Ministry of Defence, the Ministry of Home Affairs, and the Department of Personnel and Training, as informed by the Finance Ministry in the Parliament on Monday. However, a new report has dashed the employees' hopes for a higher revision of salary, stating a lower salary hike in the upcoming 8th Pay Commission than the 7th Pay Commission. Over 1 crore central government employees and pensioners have long been awaiting the update on the 8th Pay Commission since the announcement. The next pay revision is expected to become effective from January 2026. Minister of State for Finance Pankaj Chaudhary in a written reply to the Lok Sabha said inputs have been sought from major stakeholders. He added that the chairperson and members of the 8th CPC will be appointed once the commission is formally notified 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 the moment of delight with the process of the constitution of the 8th pay commission is moving forward after a delay, a report dashes their high hopes of expecting a sharp salary hike. A Financial report citing Kotak Institutional Equities states that employees may receive a lower salary hike of 13 per cent under the upcoming 8th Pay Commission as compared to a salary hike of 14.3 per cent offered under the 7th Pay Commission. The report added that the fitment factor could be fixed at 1.8 for the upcoming 8th Pay Commission, in comparison to 2.57 per cent during the 7th Pay Commission. This means the total salary hike on the basic pay would be lower than the previous one. The fitment factor is a multiplier used by the government to revise the basic salary of employees when a new Pay Commission is implemented. It helps determine the new pay by applying the factor to the existing basic salary. For example, if an employee's current basic salary is Rs 18,000 and the fitment factor is 2.0 (just for example), the revised basic salary would be Rs 32,400 (Rs 18,000 × 1.8). This does not include allowances like HRA or DA, which are calculated separately and increase overall take-home pay further. The dearness allowance (DA), currently at 55%, will be reset to zero once the new pay structure is implemented. The FE report said that while a jump in basic pay appears substantial on paper, the real hike will depend heavily on how the new DA structure is phased in after the reset. 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.
India.com
7 days ago
- Business
- India.com
8th Pay Commission: 7th CPC Pay Hike Was Lowest Since 1970, 8th CPC Salary Hike To Be Even Lower? Reports Hint At...
photoDetails english 2935494 Updated:Jul 23, 2025, 08:56 AM IST 8th Pay Commission Expected Salary Hike 1 / 10 The 8th Pay Commission is expected to recommend a subtle salary and pension hike for central government employees, which could be lower than the pay hike announced under the 7th Pay Commission. According to a report by Kotak Institutional Equities, central government employees may receive an effective salary hike of 13% vis-a-vis pay hike of 14.3 percent under 7th Pay Commission. The 7th Pay Commission (January 2016 - December 2025) had implemented a modest salary hike, which was lowest since 1970. 8th Pay Commission: Expected Fitment Factor 2 / 10 The fitment factor could be set at 1.8 percent under 8th Pay Commission, lower than the 2.7 perecent fitment factor announced under the 7th Pay Commission. Although the 1.8 fitment factor translates into 80% hike in basic pay (current basic pay multiplied by 1.8% fitment factor, the effective hike could go up by only 13% because the dearness allowance (DA) --which is currently at 55 percent --will be reset to zero once the new pay structure is implemented under the 8th Pay Commission. 8th Pay Commission: FinMin Response In Lok Sabha 3 / 10 The Finance Ministry recently responded to questions pertaining to 8th Central Pay Commission (CPC) in Lok Sabha. The response by Minister of State in the Ministry of Finance Pankaj Chaudhary on July 21, 2025 touched upon the questions posed by Members of Parliament, TR Baalu and Anand Bhadauria, regarding updates on formation of the pay panel; appointment of Chairperson and other members; Terms of Reference; and implementation of new pay scales. Constitution And Timeline Of 8th Pay Commission 4 / 10 On Constitution of 8th Pay Commission Minister of State in the Ministry of Finance Pankaj Chaudhary replied Lok Sabha: It has been decided by the government to constitute the 8th Central Pay Commission (CPC). Inputs have been sought from major stakeholders, including Ministry of Defence, Ministry of Home Affairs, Department of Personnel & Training and from states. On timeline of members, chairperson appointment she said: The chairperson and members of the 8th CPC would be appointed once the 8th CPC is notified by the Government. 8th Pay Commission Implementation 5 / 10 On implementation of 8th Pay Commission Chaudhary said: Implementation would be taken up once the recommendations are made by the 8th CPC and are accepted by the government. 8th Pay Commission For Salary Pension, Allowance Revision 6 / 10 The 8th Pay Commission will revise the pensions, allowances and salaries of central government employees and pensioners. It will also revise the Dearness Allowance as per inflation. The 8th Pay Commission benefits about 50 lakh central government employees, including defence personnel. It will also benefit around 65 lakh central government pensioners, including defence retirees. 8th Pay Commission: January 2026 Implementation Prospects Bleak 7 / 10 The prospects for the Commission's implementation on January 1, 2026, appear bleak. While the tenure of the 7th Pay Commission ends on 31 December 2025 and the constitution of the new Commission is in limbo, the central government employees and pensioners are increasingly becoming anxious. 8th Pay Commission Tor Delay Causes Anxiety 8 / 10 According to the Staff Side, the continued delay in the formal issuance of the ToRs has led to widespread speculation and uncertainty among central government employees and pensioners. It further stated that in the absence of clear and timely communication, apprehensions are growing among employees about the credibility of the announcement regarding the setting up of the 8th CPC. Many fear whether this move is a genuine administrative initiative or otherwise. ToR, Chairman Appointment: 7th Pay Commission Vs 8th Pay Commission Timeline Compared 9 / 10 The 7th CPC was announced in September 2013 and its chairman and ToR were notified in February 2014. However, since the announcement of the 8th Pay Commission on January 16, 2025, the ToR of the Commission are still pending. The government has also not officially announced the appointment of the chairman and other members of the commission. This indicates a delay in the formation of the 8th CPC. Pay Commission In Every 10 Years 10 / 10 The Central Pay Commissions are normally established once every ten years to review and recommend changes to pay scales, allowances and benefits for central government employees. Implemented in 2016, the 7th Pay Commission will remain in effect till 2026. More than one crore central government employees and pensioners are looking forward to the formation of the 8th Pay Commission, which will revise their basic pay, allowances and pension.
Mint
18-07-2025
- Business
- Mint
Expert view on Indian stock market: Market valuations stretched, but outlook remains bright, says Mayur Patel of 360 ONE
Expert view on Indian stock market: Mayur Patel, President and Fund Manager- Listed Equity, 360 ONE Asset, is positive about the Indian stock market for the long term, even as he points out that the current valuation is stretched. In an interview with Mint, Patel underscored that while near-term corrections can't be ruled out, India's fundamental story remains strong and is an 'add-on dips' story. Here are edited excerpts of the interview: While Q1 earnings remain weak, the outlook is actually encouraging. Consumer demand is poised to rebound after a prolonged slowdown. Tax reliefs, interest rate cuts, and enhanced liquidity amid cooling inflation should help revive consumption. Credit growth, currently subdued, is also expected to pick up with a lag. So, earnings trends are not the primary concern. The bigger overhang is uncertainty around US tariffs. The announcements so far are aggressive — 20–35 per cent tariffs on a range of countries are clearly negative for global trade. This raises risks of higher inflation and an economic slowdown in the US. It could also disrupt global trade, delay corporate investment decisions, and increase equity risk premiums. For India, the direct long-term impact of US tariffs is limited — merchandise exports to the US are just 2 per cent of Indian GDP, with services adding another few percentage points. However, in the short term, higher tariffs on Indian exports (if finalised) could dampen market sentiment. Interestingly, India might actually benefit over the longer term from the 'China+1' strategy, especially if Indian tariffs remain lower than those on other competing economies. We don't try to predict short-term market movements. That said, we are a bit cautious in the near term. Valuations are above average, and there's a lot of global uncertainty in the mix, whether it's US tariffs or geopolitical tensions. Trying to call near-term market movements is rarely productive. Markets are complex, and short-term movements often have more noise than signal. That said, there's no denying valuations are stretched. The Sensex P/B, which had corrected from 4.25 times in September'24 to 3.76 times in Q1, is back at 4.5 times — well above the long-term mean of 3.2 times. So yes, some volatility or even a correction is certainly possible, especially with risks like US trade policy or oil price shocks from the Middle East. But if we step back, India's domestic macro picture is solid. Growth is improving, inflation is coming down, the RBI has front-loaded rate cuts and even announced CRR cuts — all pro-growth signals. Discretionary consumption is also set to revive with the ₹ 1 trillion tax relief and upcoming Pay Commission hikes. So while near-term corrections can't be ruled out, India's fundamental story is strong. Think of it like a high-quality, high-growth stock that looks pricey today but offers long-term value — it's really an 'add-on-dips' story. We're clearly in a market where bottom-up stock selection matters far more than top-down positioning. Market internals would matter more than market timing. Key portfolio construction thoughts: (i) Growth leadership is shifting from government-led capex to consumer discretionary spending. (ii) After a strong run, value as a factor may underperform, with quality and growth factors likely to come back in favour, helped by urban consumption stimulus and a supportive rate/liquidity backdrop. (iii) Export-driven sectors are vulnerable to earnings downgrades amid global uncertainties. (iv) Prefer domestic demand-driven stories over those heavily reliant on global macros. Over the last five years, government capex grew from ₹ 3.4 trillion to ₹ 11 trillion — an impressive 27 per cent CAGR, which really helped capex-linked sectors and value stocks. Looking ahead, we're seeing the government's focus shift toward reviving consumption and encouraging private capex while controlling the fiscal deficit, with government capex growth likely to moderate. This sets the stage for a potential comeback in the growth and quality segments of the market. Coming to specific areas of preference with a slightly longer-term view, we do see robust growth prospects in the following sectors: (i) Manufacturing: Renewables, electronics, semiconductors, etc. (ii) Consumer discretionary: Benefiting from fiscal incentives and potential pay commission-related hikes. (iii) Power sector: Opportunities, especially in transmission and distribution. (iv) Auto EV plays: Positioned for sustained growth driven by rising penetration of EVs. (v) Quick commerce: Emerging space with significant growth potential. (vi) Pharma CDMO: Leveraging India's global competitive advantage. (vii) Telecom: Sector attractiveness enhanced by industry consolidation. (viii) High-quality NBFCs: Consistent growth leaders. (ix) Private banks: Offering attractive valuations and stable growth. At current valuation levels, it's important to keep short-term return expectations modest, and instead focus on systematic, long-term investing. Historically, as investors stretch their horizon from one year to five years, volatility in returns — as measured by standard deviation—reduces significantly, and the risk-reward ratio improves. If we look past short-term volatility, we feel good about H2. Consumption should recover, credit growth is likely to pick up, and lower rates will support overall growth. Also, with market ROEs of around 15%, each passing year naturally compresses P/B multiples, improving the long-term risk-reward balance. In short, the cyclical rebound in discretionary consumption and the steady rise of manufacturing are India's two big growth drivers in the coming years. So, have some appetite for short-term volatility and invest systematically in this structural growth story. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
