8th Pay Commission: The National Council of Joint Consultative Machinery (NC-JCM) has put forth a significant proposal concerning the Eighth Pay Commission. The organization suggests that the Eighth Central Pay Commission should apply a fitment factor of 3.833 to establish the basic salary for over 4.5 million central government employees and around 6 million pensioners nationwide. The NC-JCM is responsible for facilitating negotiations between the central government and its employees.
Additionally, the organization has recommended that the minimum wage be fixed at Rs 69,000 based on this new fitment factor. This proposal encompasses modifications to the salary structure, mergers of pay scales, and an increase in annual salary increments from 3% to 6%.This calculation also considers daily expenses, including the average costs of food, clothing, housing (7.5%), fuel (20%), utility bills for electricity and water, skill development (25%), and other expenses related to weddings, entertainment, and festivals (25%).
The proposal received unanimous approval during the final meeting of the drafting committee on April 13, where a comprehensive memorandum covering eight key topics was also presented.Demand to consider family as 5 unitsAt present, the government recognizes a family as three units when calculating salaries, but the organization contends that this is inaccurate. The NC-JCM insists that families should be regarded as five units. This classification includes the employee and their spouse as one unit each, two children as 0.8 units each, and the parents as 0.8 units. This totals 5.2 units, which should be rounded down to five units. This is the proposal put forth by the NC-JCM.
Employee unions have also offered legal reasoning for this. They assert that under the Maintenance and Welfare of Parents and Senior Citizens Act and the Social Security Code, 2020, dependent parents are included in the family definition. Moreover, female employees can also consider their in-laws as part of their family.Based on this, the employees have suggested that the minimum salary for a family of five units should be Rs 69,000. Based on this, the fitment factor for existing employees and pensioners has been proposed to be 3.833.
Pay scale merger proposal
The NC-JCM has also suggested merger of pay scales to simplify the salary structure, thereby reducing disparity in pay at different levels.What will be the impact of 3.833 fitment factor on salary?The fitment factor is a calculation that helps increase the basic salary of central government employees uniformly across all levels. If the Eighth Pay Commission approves the 3.833 fitment factor and the proposed merger at the employee level, employees’ salaries could see a significant increase. For example, employees in Pay Level 1, whose basic salary currently ranges between Rs 18,000 and Rs 56,000, could see their salaries increase to around Rs 69,000.Such changes have occurred before. In 2016, the 7th Pay Commission implemented a fitment factor of 2.57.
Consequently, employees or pensioners with a basic salary of Rs 15,000 saw their salaries increase to Rs 38,550 (Rs 15,000 × 2.57). The fitment factor was introduced after the 4th Pay Commission (1986). The 6th Pay Commission adopted a 1.86 factor, while the 5th Pay Commission provided a 40% increase over basic pay.
What will be the impact of the proposed fitment factor on dearness allowance (DA)?
If an employee’s basic salary increases, it directly impacts the dearness allowance (DA) and dearness relief (DR) of pensioners. This is because DA and DR are always calculated as a percentage of the basic salary. The government has not yet announced the DA revision, which will take effect in January. Previously, DA was increased from 54% to 58% in July 2025.DA is calculated on the basis of All-India Consumer Price Index for Industrial Workers (AICPI-IW), which is released by the Ministry of Labour and Employment.Employees’ organisations have also suggested that DA should be fixed on the basis of 6 months’ average instead of 12 months’ average, as it is paid every six months.
