8th Pay Commission: Currently, the 8th Pay Commission is a hot topic among government employees. Just last month, the government unveiled its Terms of Reference (ToR), which has sparked even more interest regarding potential salary increases and the possible fitment factor. This factor will play a crucial role in determining the new basic salary.
What exactly is the fitment factor?
In simple terms, the fitment factor acts as a multiplier that transforms the old basic salary into a new one. For instance, during the 7th Pay Commission, it was established at 2.57, meaning the new basic salary was calculated by multiplying the old basic salary by 2.57. Now, the pressing question is what will transpire in the 8th Pay Commission.
How is the fitment factor determined?
Several elements are taken into account when setting the fitment factor, including inflation, living costs, and the essential needs of families. This evaluation also utilizes Dr. Wallace R. Ackroyd’s formula, which considers food, clothing, housing, and general consumption.
What is the expected increase in the fitment factor?
A report from financial firm Ambit Capital suggests that the fitment factor may range from 1.83 to 2.46. If this projection holds true, the minimum basic salary of Rs 18,000 could rise as follows:
At a 1.83 factor: approximately Rs 32,940
At a 2.46 factor: around Rs 44,280
This indicates a potential minimum wage increase of between 14% and 54%. However, a 54% increase is deemed unlikely, as it would place a considerable financial strain on the government.
What could the new salary be across various grade pays?
The fitment factor for the 8th Pay Commission is anticipated to fall between 1.92 and 2.57, and based on this, we may witness significant salary adjustments across different pay grades. Below, in straightforward terms, are the estimated new salaries for each pay grade, which encompass basic pay along with HRA, TA, NPS, and CGHS.