Central government employees currently receive a 3% annual increment under the 7 th Pay Commission. In their recommendations to the 8 th Pay Commission, employee groups have asked for a significant increase in this 3% increment. They argue that a 3% annual salary hike is insufficient as the basic salary doesn’t even double over a decade. These employee groups are pushing for an at least 5% hike annually.
They argue that a 5% annual raise, along with merging the dearness allowance (DA) with basic pay once the DA hits 25%, could substantially boost the salaries of the central government employees.
According to Bankbazaar, if the 8 th Pay Commission opts for a 2.1 fitment factor and raises the annual increment rate from 3% to 6%, Level 1-8 employees could see an additional Rs 20.59 lakh in basic pay over 10 years.
Also Read: DA hike for June 2026: Central government employees likely to get 63% dearness allowance after hike
What central government employee bodies have recommended about annual increment?
The National Council of the Joint Consultative Machinery (NC-JCM), the main central government employee body in India, in its memorandum submitted to the 8 th Pay Commission, has suggested increasing the annual increment to 6%.
The All India Defence Employees’ Federation (AIDEF), the body that represents defence civilian employees, and the Federation of National Postal Organisations (FNPO) have also suggested increasing the annual increment to 6%.
On the other hand, the All India New Pension Scheme Employees Federation (AINPSEF) has recommended that the increment should be 7% annually. The Indian Railways Supervisors’ Association (IRTSA) wants the annual increment to go up to 5%.
Employee bodies’ recommendations for annual increment from 8th Pay Commission
| Organisation | Proposed Annual Increment |
| National Council of the Joint Consultative Machinery (NC-JCM) | 6% |
| All India Defence Employees' Federation (AIDEF) | 6% |
| Federation of National Postal Organisations (FNPO) | 6% |
| All India New Pension Scheme Employees Federation (AINPSEF) | 7% |
| Indian Railways' Supervisors' Association (IRTSA) | 5% |
How higher annual increment can benefit central government employees
Bankbazaar in its calculations for Level 1, 4, 6 and 8 employees show how they may get up to Rs 20.56 extra basic pay in 10 years if the 8 th Pay Commission settles on a 2.1 fitment factor and decides to increase the annual increment rate from 3% to 6%.
For Level 1 employees, salary benefit in 10 years at 3% vs 6% annual pay incremen t
| Basic pay - Level 4 | ₹ 18,000.00 |
| Revised basic @ x2.1 | ₹ 37,800.00 |
| Year | Monthly Basic (with 3% Increment) |
Annual Salary (3%) | Monthly Basic (with 6% Increment) |
Annual Salary (6%) |
| 1 | ₹ 37,800 | ₹ 4,53,600 | ₹ 37,800 | ₹ 4,53,600 |
| 2 | ₹ 38,934 | ₹ 4,67,208 | ₹ 40,068 | ₹ 4,80,816 |
| 3 | ₹ 40,102 | ₹ 4,81,224 | ₹ 42,472 | ₹ 5,09,665 |
| 4 | ₹ 41,305 | ₹ 4,95,661 | ₹ 45,020 | ₹ 5,40,245 |
| 5 | ₹ 42,544 | ₹ 5,10,531 | ₹ 47,722 | ₹ 5,72,660 |
| 6 | ₹ 43,821 | ₹ 5,25,847 | ₹ 50,585 | ₹ 6,07,019 |
| 7 | ₹ 45,135 | ₹ 5,41,622 | ₹ 53,620 | ₹ 6,43,440 |
| 8 | ₹ 46,489 | ₹ 5,57,871 | ₹ 56,837 | ₹ 6,82,047 |
| 9 | ₹ 47,884 | ₹ 5,74,607 | ₹ 60,247 | ₹ 7,22,969 |
| 10 | ₹ 49,320 | ₹ 5,91,845 | ₹ 63,862 | ₹ 7,66,348 |
| Total pay in 10 years | ₹ 52,00,016 | ₹ 59,78,809 | ||
| Extra pay in 10 years | ₹ 7,78,793 |
In the calculations, you can see that even a Level 1 employee can earn nearly Rs 7.79 lakh extra basic pay in 10 years if the fitment factor is 2.1 and the annual salary increment in 6% instead of 3%.
For Level 4 employees, salary benefit in 10 years at 3% vs 6% annual pay increment
| Basic pay - Level 4 | ₹ 25,500.00 |
| Revised basic @ x2.1 | ₹ 53,550.00 |
| 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 |
Note: Illustrative estimates based on assumed fitment factors and annual increment rates. Actual pay progression may differ.
With a rise in basic pay, the 10-year salary benefit can be higher for higher levels of employees. Like a Level 4 employee may get up to Rs 11.04 lakh extra basic pay in 10 years.
For Level 6 employees, salary benefit in 10 years at 3% vs 6% annual pay increment
| Current basic - Level 6 | ₹ 35,400.00 |
| Revised basic @ x2.1 | ₹ 74,340.00 |
| Year | Monthly Basic (with 3% Increment) |
Annual Salary (3%) | Monthly Basic (with 6% Increment) |
Annual Salary (6%) |
| 1 | ₹ 74,340 | ₹ 8,92,080 | ₹ 74,340 | ₹ 8,92,080 |
| 2 | ₹ 76,570 | ₹ 9,18,842 | ₹ 78,800 | ₹ 9,45,605 |
| 3 | ₹ 78,867 | ₹ 9,46,408 | ₹ 83,528 | ₹ 10,02,341 |
| 4 | ₹ 81,233 | ₹ 9,74,800 | ₹ 88,540 | ₹ 10,62,482 |
| 5 | ₹ 83,670 | ₹ 10,04,044 | ₹ 93,853 | ₹ 11,26,230 |
| 6 | ₹ 86,180 | ₹ 10,34,165 | ₹ 99,484 | ₹ 11,93,804 |
| 7 | ₹ 88,766 | ₹ 10,65,190 | ₹ 1,05,453 | ₹ 12,65,433 |
| 8 | ₹ 91,429 | ₹ 10,97,146 | ₹ 1,11,780 | ₹ 13,41,358 |
| 9 | ₹ 94,172 | ₹ 11,30,060 | ₹ 1,18,487 | ₹ 14,21,840 |
| 10 | ₹ 96,997 | ₹ 11,63,962 | ₹ 1,25,596 | ₹ 15,07,150 |
| Total pay in 10 years | ₹ 1,02,26,697 | ₹ 1,17,58,324 | ||
| Extra pay in 10 years | ₹ 15,31,626 |
For Level 8 employees, salary benefit in 10 years at 3% vs 6% annual pay increment
| Basic Pay - Level 8 | ₹ 47,600.00 |
| Revised basic @ x2.1 | ₹ 99,960.00 |
| Year | Monthly Basic (with 3% Increment) |
Annual Salary (3%) | Monthly Basic (with 6% Increment) |
Annual Salary (6%) |
| 1 | ₹ 99,960 | ₹ 11,99,520 | ₹ 99,960 | ₹ 11,99,520 |
| 2 | ₹ 1,02,959 | ₹ 12,35,506 | ₹ 1,05,958 | ₹ 12,71,491 |
| 3 | ₹ 1,06,048 | ₹ 12,72,571 | ₹ 1,12,315 | ₹ 13,47,781 |
| 4 | ₹ 1,09,229 | ₹ 13,10,748 | ₹ 1,19,054 | ₹ 14,28,648 |
| 5 | ₹ 1,12,506 | ₹ 13,50,070 | ₹ 1,26,197 | ₹ 15,14,366 |
| 6 | ₹ 1,15,881 | ₹ 13,90,572 | ₹ 1,33,769 | ₹ 16,05,228 |
| 7 | ₹ 1,19,357 | ₹ 14,32,290 | ₹ 1,41,795 | ₹ 17,01,542 |
| 8 | ₹ 1,22,938 | ₹ 14,75,258 | ₹ 1,50,303 | ₹ 18,03,635 |
| 9 | ₹ 1,26,626 | ₹ 15,19,516 | ₹ 1,59,321 | ₹ 19,11,853 |
| 10 | ₹ 1,30,425 | ₹ 15,65,102 | ₹ 1,68,880 | ₹ 20,26,564 |
| Total pay in 10 years | ₹ 1,37,51,153 | ₹ 1,58,10,627 | ||
| Extra pay in 10 years | ₹ 20,59,475 |
A Level 8 employee may get up to Rs 20.60 lakh extra total basic salary in 10 years at a 2.1 fitment factor and a 6% annual increment. The salary benefit can be higher if the fitment factor is higher than 2.1.
Assumptions for annual increment calculations
Basic salary= As per 7 th Pay Commission
Revised salary - Basic pay x fitment factor (2.1)
Annual increment (at 3%) of revised basic pay
Total salary in 10 years (at 3% increment)
Annual increment (at 6%) of revised basic pay
Total salary in 10 years (at 6% increment)
Extra salary in 10 years = (Total pay in 10 years at 6% annual increment) - (Total pay in 10 years pay at 3% annual increment)
