Good news for over 10 million central employees and pensioners across the country! Following the Commission’s in-principle approval in January 2025, the government has indicated that the Commission’s formation may be announced soon. Discussions are underway with state governments. Recently, Minister of State for Finance Pankaj Chaudhary made it very clear in the Rajya Sabha that the official announcement of the 8th Pay Commission will be made at an appropriate time, followed by the appointment of the Chairman and members.
Fitment Factor in Salary Determination
The Fitment Factor is a crucial and most important parameter in determining salaries and pensions for central employees and pensioners. The central government may consider adopting Dr. Wallace Ackroyd’s Ackroyd Formula to determine the correct wage based on the minimum cost of living. This formula takes into account the nutritional needs of an average employee, which includes the cost of essential items such as food, clothing, and housing.
Possible Calculation of Fitment Factor
Currently, dearness allowance (DA) is 58 percent. DA is expected to reach 60 percent by the time the 8th Pay Commission is implemented.
Given 60 percent DA, the basic fitment factor would be 1.60.
An additional increase of 10 to 30 percent is possible.
For example, an additional increase of 20 percent would result in a fitment factor of 1.92, while an increase of 30 percent would result in a fitment factor of 2.08.
The new salary will be calculated using the formula
Revised Pay = Basic Pay × Fitment Factor
What will be the minimum salary increase after the 8th Pay Commission
The implementation of the 8th Pay Commission will change the fortunes of millions of employees. Currently, the minimum basic salary for central employees under the 7th Pay Commission is ₹18,000, and the minimum basic pension for pensioners is ₹9,000. Additionally, they receive 58 percent DA/DR.
If the Fitment Factor is 1.92
When the 8th Pay Commission is implemented, DA/DR will be reduced to zero.
If the Fitment Factor is kept at 1.92, the new minimum basic pay for employees will be ₹34,560.
(₹18,000 × 1.92 = ₹34,560)
The minimum basic pension for pensioners will be ₹17,280.
(₹9,000 × 1.92 = ₹17,280)
If the Fitment Factor is 2.08
If the Fitment Factor is 2.08, the new minimum basic pay for employees will be ₹37,440.
(₹18,000 × 2.08 = ₹37,440)
The minimum basic pension for pensioners will be ₹18,720.
(₹9,000 × 2.08 = ₹18,720)
The wait for the announcement of the 8th Pay Commission will be a major turning point for over one crore central government employees and pensioners, as it will determine the significant increase in their salaries and pensions.