Major Proposal in the 8th Pay Commission, Salary Increase with 3.25 Fitment Factor

Central Employees Fitment Factor: Central employees and pensioners have been waiting for the implementation of the 8th Pay Commission for a long time. Meanwhile, an important update has emerged. The Federation of National Postal Organizations (FNPO) has demanded that the government increase the annual increment from 3 percent to 5 percent and increase the fitment factor from 3.0 to 3.25. If the government approves these proposals, employees’ salaries could see a significant increase each year, and the amount of arrears could also increase significantly.

Currently, central government employees receive a 3 percent increment every year. The FNPO argues that a 3 percent increase is insufficient in the current inflationary environment. This is widening the salary gap between the government and the private sectors. Implementing a 5 percent annual increment could significantly improve employees’ incomes and reduce the salary gap to some extent.

What is the Fitment Factor?

The main basis for salary increases under the Pay Commission is the fitment factor. This is a coefficient that multiplies an employee’s current basic salary to determine the new basic salary. The higher the fitment factor, the greater the salary increase.

For example, if an employee’s basic salary is ₹18,000 and the fitment factor is 2.57, the new basic salary is ₹46,260. The same fitment factor of 2.57 was applied in the Seventh Pay Commission.

What is the FNPO’s proposal?

The FNPO has suggested implementing a multi-layered system instead of a uniform fitment factor for the Eighth Pay Commission. Accordingly, different fitment factors should be set for different pay levels.

A fitment factor of 3.00 is proposed for employees from Level 1 to Level 5. If implemented, the minimum basic salary could increase from ₹18,000 to ₹54,000. The organization argues that lower-level employees have suffered greater actual salary losses and should receive greater benefits.

A fitment factor of 3.05 to 3.10 has been suggested for levels 6 to 12 to maintain the promotion and seniority gap. 3.05 is proposed for levels 13 and 13A, while 3.15 is proposed for levels 14 and 15. A fitment factor of 3.20 has been suggested for level 16 and 3.25 for levels 17 and 18.

When might the Eighth Pay Commission be implemented?

The central government typically implements a new pay commission every ten years. The Seventh Pay Commission was considered effective from January 1, 2016, even though it was approved later. Based on this, it is believed that the Eighth Pay Commission could also be effective from January 1, 2026, although it may take 18 to 24 months to finalize its recommendations.

It should be noted that after the meeting on February 15, 2025, the National Council Joint Consultative Mechanism (NCJCM) will prepare a final draft, which will be sent to the Commission’s Chairperson. The government will then decide which demands to accept.

What is a Pay Commission?

The Pay Commission is a committee constituted by the Central Government to recommend revisions to the salaries, allowances, and pensions of government employees and pensioners. Its objective is to maintain a balanced standard of living for employees in line with inflation.

The first Pay Commission in India was constituted in 1946. Subsequently, changes have been made to the pay structure from time to time. The Seventh Pay Commission implemented the Pay Matrix system, while the Eighth Pay Commission is discussing the multi-layer fitment factor.

Overall, if the 5 percent annual increment and higher fitment factor are approved, central employees’ salaries could see a significant change. However, the final decision will depend on government approval.