8th Pay Commission: Rs 69,000 minimum pay, 40% HRA, 67% pension; 5 key NC-JCM demands and their impact on payouts

The National Council of the Joint Consultative Machinery, NC-JCM (staff side), the main central government employees’ body, in its memorandum submitted to the 8th Pay Commission, made a number of recommendations for pay, pension, allowance and other service conditions of employees.

Some of the NC-JCM’s key proposals were about revised pay, pension, fitment factor, house rent allowance (HRA) rates, annual increment rate and leave encashment.

The employee body also recommended the revival of the Old Pension Scheme (OPS), more promotions in jobs, higher child education allowance and better healthcare and medical benefits.


Here, we take you through five of its key demands and how they can impact the payouts for over one crore central government employees and pensioners.

1.Rs 69,000 minimum pay and 3.833 fitment factor

The NC-JCM has recommended the 8th Pay Commission to increase the minimum salary of a central government employee from Rs 18,000 to Rs 69,000. It means a 3.833-fold rise, implying the demand for a 3.833 fitment factor.

NC-JCM’s proposed pay levels to 8th Pay Commission

S. No.	Proposed Level	Existing Pay Matrix (₹)	Proposed Minimum Pay (₹)
1	Pay Scale 1 (Existing Level 1)	18,000–56,900	69,000
2	Pay Scale 2 (Merger of Levels 2 & 3)	21,700–69,100	83,200
3	Pay Scale 3 (Merger of Levels 4 & 5)	29,200–92,300	1,12,000
4	Pay Scale 4 (Existing Level 6)	35,400–1,12,400	1,35,700
5	Pay Scale 5 (Merger of Levels 7 & 8)	47,600–1,51,100	1,82,500
6	Pay Scale 6 (Merger of Levels 9 & 10)	56,100–1,77,500	2,15,100
7	Pay Scales 7–13 (Existing Levels 11–17)	Retained using fitment factor 3.833	Not specified

2. Higher pension and family pension

The NC-JCM has proposed pension equivalent to 67% of the last pay drawn and family pension equivalent to 50% of the last pay drawn. At present, pension and family pension are 50% and 30% of the last pay drawn. If the NC-JCM’s demands are accepted, this is how the new rates can impact pension and family pension payouts, assuming a 2.0 fitment factor for the 8th Pay Commission.

Current pensionable pay	Pension (at 50% of last-pay drawn)	Family pension (at 30% of last-pay drawn)	8th CPC proposed pension (at 67% of last-pay drawn and 2 fitment factor)	8th CPC proposed family pension (at 50% of last-pay drawn) and 2 fitment factor
₹ 50,000	₹ 25,000	₹ 15,000	₹ 67,000	₹ 50,000
₹ 1,00,000	₹ 50,000	₹ 30,000	₹ 1,34,000	₹ 1,00,000
₹ 1,50,000	₹ 75,000	₹ 45,000	₹ 2,01,000	₹ 1,50,000
₹ 2,00,000	₹ 1,00,000	₹ 60,000	₹ 2,68,000	₹ 2,00,000

3.6% annual increment rate

The NC-JCM has also recommended increasing the annual increment rate from 3% to 6%. Central government employees get a 3% increment every year on their basic pay. The employees’ body says that such an increment rate is inadequate for employees to meet rising inflation. Here’s an illustration of how a 6% annual increment may look against the 3% increment rate for a Level 4 employee.

Basic pay of Level 4 employee= Rs 25,500

Estimated revised basic pay at 2.1 fitment factor= Rs 53,550

Year	Monthly Basic(with 3% Increment)	Annual Salary (3%)	Monthly Basic(with 6% Increment)	Annual Salary (6%)
1	₹ 53,550	₹ 6,42,600	₹ 53,550	₹ 6,42,600
2	₹ 55,157	₹ 6,61,878	₹ 56,763	₹ 6,81,156
3	₹ 56,811	₹ 6,81,734	₹ 60,169	₹ 7,22,025
4	₹ 58,516	₹ 7,02,186	₹ 63,779	₹ 7,65,347
5	₹ 60,271	₹ 7,23,252	₹ 67,606	₹ 8,11,268
6	₹ 62,079	₹ 7,44,950	₹ 71,662	₹ 8,59,944
7	₹ 63,942	₹ 7,67,298	₹ 75,962	₹ 9,11,540
8	₹ 65,860	₹ 7,90,317	₹ 80,519	₹ 9,66,233
9	₹ 67,836	₹ 8,14,026	₹ 85,351	₹ 10,24,207
10	₹ 69,871	₹ 8,38,447	₹ 90,472	₹ 10,85,659
Total pay in 10 years		₹ 73,66,689		₹ 84,69,979
Extra pay in 10 years				₹ 11,03,290

4.HRA slabs of 30%, 35% and 40%

As per the 7th Pay Commission, HRA slabs for Z, X and Y cities are 24%, 16% and 8%, respectively. But these rates reached 30%, 20% and 10% when DA reached 50% in January 2024.

However, the NC-JCM has recommended that the 8th Pay Commission increase these slabs to 30%, 35% and 40%, respectively. Let’s see how the proposed HRA rates may increase the HRA amount for a Level 5 employee.

Level 5 basic pay= Rs 29,200

Revised basic pay at 2.1 fitment factor= Rs 61,320

City category	Current HRA rate	Current HRA (₹29,200 basic)	Revised HRA rate	Revised HRA (₹61,320 basic)	Monthly HRA increase
X category	30%	₹ 8,760	40%	₹ 24,528	₹ 15,768
Y category	20%	₹ 5,840	35%	₹ 21,462	₹ 15,622
Z category	10%	₹ 2,920	30%	₹ 18,396	₹ 15,476

5.Leave encashment of up 600 days

At present, central government employees get a maximum of 300 days of leave encashment at retirement. The calculation of the leave encashment amount is based on the pay admissible on retirement, which includes the basic pay and dearness allowance (DA). The NC-JCM has recommended that the 8th Pay Commission increase the leave encashment at retirement to a maximum of 600 days.

Here’s how the leave encashment for an employee retiring at Rs 50,000 basic pay and 63% DA under the 7th Pay Commission may look.

Particulars	Current pay scenario	Illustrative revised pay scenario
Basic pay	₹ 50,000	₹ 1,00,000
Dearness Allowance (DA)	63%	0%
DA amount	₹ 31,500	₹ 0
Admissible pay (Basic + DA)	₹ 81,500	₹ 1,00,000
Leave days assumed for encashment	300 days	600 days
Leave encashment amount	₹ 8,15,000	₹ 20,00,000
Increase in illustrative leave encashment		₹11,85,000

These are illustrative examples as the real increase in payouts will depend on the notified rates of the 8th Pay Commission.