The 8th Pay Commission has not been formed yet, but discussions are already going on about the fitment factor. A report by financial services firm Ambit Capital has estimated that the new Pay Commission may recommend a fitment factor between 1.83 and 2.46 for employees. This estimate is based on the salary growth seen during the previous Pay Commissions.
Possibility of 14% to 54% Salary Increase
According to a report by Ambit Capital, the total salary increase (including basic pay + DA) under the 8th Pay Commission can be at least 14% and at most 54%. However, the report also mentions that a 54% increase is very unlikely, as it would put a heavy financial burden on the government.
Ambit Capital said, “The government may consider a higher salary increase to boost consumption, but a 54% hike, like in the 6th Pay Commission, does not seem possible.”
30% to 34% Hike Most Likely
As per Ambit’s analysis, a mid-range increase of 30% to 34% seems more likely. This range is something the government and the Pay Commission may consider. According to the report, in the worst-case scenario, the increase could be around 14.3%, while in the best-case scenario, it could go up to 54%.
Based on this, three possible fitment factors have been estimated:
- 1.83 (Minimum)
- 2.15 (Mid-range/Median)
- 2.46 (Maximum)
What Can Be the New Salary on ₹40,000 Basic Pay?
If an employee’s current basic salary is ₹40,000, then the possible total salary (Basic + DA) under different fitment factors can be:
| Fitment Factor | Current Basic Salary | Possible New Salary |
|---|---|---|
| 1.83 | ₹40,000 | ₹92,238 |
| 2.15 | ₹40,000 | ₹1,09,002 |
| 2.46 | ₹40,000 | ₹1,20,933 |
DA May Reach 60% by 2025
Currently, the Dearness Allowance (DA) is around 55%. According to the report, it may reach 60% by the end of 2025. Looking at the trend of the last four Pay Commissions, a minimum salary growth of 14% is expected under the 8th Pay Commission.
Government employees and pensioners are still waiting for the 8th Pay Commission to be officially formed and for its Terms of Reference to be announced.
What is the Fitment Factor?
The Fitment Factor is a number used to calculate the new salary when a new Pay Commission is implemented. It is applied to the current basic pay to decide the revised total salary (Basic + DA and other components).
Example:
If an employee’s basic salary is ₹40,000 and the fitment factor is 2.15, then the new salary would be around ₹1,09,000. This method is a standard formula that the Pay Commission recommends for salary revision.