8th Pay Commission: Shock or relief for government employees? Pay Commission may adopt a ‘miser’ stance on fitment factor!

The Eighth Central Pay Commission is in the final stages of negotiations with the state governments. Considering the financial burden on the Center and the states, the Commission may exercise caution in the matter of ‘fitment factor’. Although the Commission has not yet finalized its recommendations, initial discussions indicate that the fitment factor may remain around the 2.57 multiplier adopted by the 7th Pay Commission, while employee unions are demanding further increase. The fitment factor, which determines the new pay level by multiplying the existing basic pay and pension, is the most important part of the salary revision process.

Financial Burden Assessment

A senior government official with knowledge of the discussions said in the ET report that the process is now focusing on the possible range of fitment factors, negotiations with state governments and assessing the financial impact of the revised pay and pension structure. Assessment of the financial burden on the central and state governments can play a decisive role in deciding the final structure. Government employees have demanded a huge increase in their demands, which include a multiplier of 3.83 and a minimum basic salary of Rs 69,000.

Meetings have been held in these states

The process of submitting the memorandum ended on June 15, completing the formal demands of employee unions, pensioners and other stakeholders. Now the Commission will review these demands as well as the information received from the states (like Uttar Pradesh, Odisha and West Bengal). Earlier, meetings have been held to reach out to stakeholders in Delhi, Ladakh, Jammu and Kashmir, Telangana, Maharashtra and other areas. Once the remaining negotiations are completed, the panel is expected to consolidate the information received before drafting its report.

This report will decide the revised salary and pension structure for central employees and pensioners. The 7th Pay Commission had implemented a fitment factor of 2.57, which increased the minimum basic pay from Rs 7,000 to Rs 17,990, while the Centre’s revenue expenditure increased from 4.8 per cent in 2015-16 to 9.9 per cent in 2016-17.