8th Pay Commission: Fitment Factor Likely to Shape 20–30% Salary Hike for Central Govt Staff

8th Pay Commission: The central government kicked off the formation of the 8th Pay Commission in early November. Once the chairman and members were appointed, the hot topic among employees and pensioners became the fitment factor. This fitment factor serves as a multiplier that decides how much your basic salary and pension will rise. But how is this fitment factor figured out? What factors have been in play before? And what can we expect from the 8th Pay Commission?

How is the fitment factor figured out?

The fitment factor isn’t set by a strict formula; instead, it’s determined by looking at various economic and administrative elements. These include inflation, the CPI and CPI-IW indexes, the government budget, total salary expenses, and salaries for similar roles in the private sector. All these factors help shape the fitment factor, which aims to keep a balanced salary structure and ensure employees get a fair raise.

What was the fitment factor in the earlier pay commissions?

When we check out past commissions, the 6th Pay Commission first suggested a factor of 1.74, but the Cabinet bumped it up to 1.86 after employees made their case. In contrast, the 7th Pay Commission set a uniform factor of 2.57 for everyone. This was because the addition of 125% DA already increased salaries by about 2.25 times. The Commission then added the actual 14% increase to the multiplier, leading to a total multiplier of 2.57.

Will there be a different formula for each level? And can the cabinet change it?

For the 8th Pay Commission, the fitment factor is expected to stay the same across all levels (1–18). While the rationalization index changes at different levels, the fitment factor adjusts accordingly. Moreover, the Pay Commission’s suggestions aren’t always put into action. Just like the government applied a higher factor than what the Commission proposed in the 6th Pay Commission, the Cabinet has the power to raise or lower the factor in the 8th Pay Commission based on their discretion.

What will be the impact on your salary and pension?

If an employee’s basic pay is Rs 18,000, it can reach Rs 32,940 at a factor of 1.83 and Rs 44,280 at a factor of 2.46. For those with a basic pay of Rs 50,000, their new basic pay can be Rs 91,500 at a factor of 1.83 and Rs 123,000 at a factor of 2.46. The same rule applies to pensioners. For example, if someone’s basic for pension calculation is Rs 25,000, and a factor of 2.0 is applied in the 8th Pay Commission, the new basic will be Rs 50,000 and the new pension will be Rs 25,000 (i.e. 50%).