Central employees across the country are waiting for the recommendations of the 8th Pay Commission, on the other hand the Commission is busy preparing its recommendations. Employee organizations are demanding from the Commission to fix higher fitment factor. The National Council-Joint Consultative Machinery (NC-JCM) has demanded a fitment factor of 3.83. However, many experts are saying that it is difficult to get such a big fitment factor. He estimates that the Commission can fix the fitment factor between 2.0 to 2.25. However, there is still a lot of time for the recommendations to come out, but in the meantime the fitment factor is in the news.
In such a situation, the question arises whether higher fitment factor means higher salary increase? How does fitment factor affect total salary? Also, we will know how if the fitment factor is high then the salary does not increase proportionately?
After all, what is fitment factor?
In simple language, fitment factor is a mathematical coefficient i.e. multiplier. It is used by the Pay Commission to convert the basic pay of government employees and pension of pensioners into the new pay structure. This coefficient is multiplied by the basic salary. That is, the higher this number is, the basic salary will be the same. Its advantage is that it becomes easier to increase the salaries of all levels of employees uniformly. The thing to note is that the fitment factor has a direct impact only on the basic salary. However, some allowances like HRA are decided on the basis of basic salary, hence their effect also changes as the basic increases. Whereas DA is calculated according to the rates fixed by the government.
Will the salary also increase as the fitment factor increases?
The answer to this question is no. Many people think that if the fitment factor is fixed at 2.57, then their salary will increase by 157%. But this does not happen. Fitment factor mainly affects the basic salary, whereas apart from the basic pay, the gross salary of the employees also includes dearness allowance (DA), house rent allowance (HRA) and other allowances.
What do previous pay commissions reveal?
Data from previous pay commissions show that higher fitment factor does not mean that the total salary will increase by the same amount. The fitment factor in the 7th Pay Commission was 2.57, but according to BankBazaar’s analysis, the gross salary had increased by about 14.29%. On the other hand, the fitment factor in the 6th Pay Commission was only 1.86, yet there was an increase of 54% in the gross salary.
Why did this happen?
According to experts, the biggest reason for this is Dearness Allowance (DA). When the 7th Pay Commission came into effect, employees were already getting 125% DA. That means a huge dearness allowance was already attached to the old salary. Therefore, even after implementation of 2.57 fitment factor, the increase in total salary remained limited. According to All India New Pension Scheme Employees Federation (AINPSEF), the old pay structure was also balanced in the 7th Pay Commission. For this reason, the increase in the average gross salary of employees was only 14.29%. Whereas, at the time of 6th Pay Commission, DA was only 24%. Therefore, the effect of 1.86 fitment factor was more visible and the total salary of the employees increased by 54%.
How much can the salary increase in the 8th Pay Commission?
According to the estimates of financial website BankBazaar, if the fitment factor is fixed between 2.0 to 2.57 in the 8th Pay Commission, then the gross salary of employees from level-11 to level-18 can increase by about 31% to 68%. Although this is just a guess. The final increase will depend on which fitment factor the government approves and what will be the status of other allowances including DA at that time.
Also read- There may be a big increase in HRA in the 8th Pay Commission
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