New Delhi: The fortunes of central government employees and pensioners are set to improve significantly once the 8th Pay Commission is implemented. The central government is expected to open its coffers soon, a development that many have been eagerly awaiting. A committee constituted for the new Pay Commission is visiting various cities to hold consultations with central government employee unions and gather their feedback.
A key question on everyone’s mind is: by how much will salaries increase once the 8th Pay Commission is implemented? Similarly, there is significant interest regarding the extent to which pensions will rise. Notably, it is anticipated that the minimum basic salary could increase from ₹18,000 to ₹69,000 upon the implementation of the new Pay Commission, a major boost for employees.
What fitment factor are the employees demanding?
Central government employee unions are demanding a fitment factor of 3.83 under the 8th Pay Commission. The All India Defence Employees Federation has also requested a fitment factor of 3.83. A fitment factor acts as a multiplier, which the central government uses to revise the salaries, pensions, and allowances of its employees.
This factor is applied by multiplying the existing basic salary to determine the new basic salary. Under the 7th Pay Commission, the fitment factor was 2.57, which raised the minimum basic salary for employees to ₹18,000.
How much will the salary increase?
Central government employees can expect a substantial hike in their pay. If the government accepts the proposed fitment factor of 3.83, the minimum basic salary for central government employees would rise from ₹18,000 to ₹69,000. Specifically, multiplying the current minimum basic pay of ₹18,000 by the proposed fitment factor of 3.83 results in a figure of ₹68,994, approximately ₹69,000. This amount proved to be like a booster dose for the employees.
The central government also considers the budgetary implications for the states. Furthermore, the salaries of government employees can be compared against those offered in the private sector and by Public Sector Undertakings (PSUs). Experts suggest that the central government might set the fitment factor somewhere between 2.6 and 3.0.
The final decision on this matter rests with the government. When determining salary increases for the 8th Pay Commission, the government does not look solely at the ‘fitment factor.’ It also takes into account the state of the national economy and the public exchequer, expenditure on development schemes, and the potential increase in costs associated with the Old Pension Scheme.
