8th pay commission: The 8th pay commission has not been formed yet. However, the discussion about the fitment factor is in full swing. A report by the Financial Services firm Amber Capital estimates that the new pay commission may recommend the fitment factor between 1.83 and 2.46 for employees. This estimate has been made on the basis of salary growth during previous pay commissions.
Possibility of increase from 14% to 54%
According to the report, the 8th Pay Commission may contain the actual increment of at least 14% and a maximum of 54% (including Basic Pay + DA). However, the report also says that the maximum increase of maximum increase of 54% is extremely low, as it will put a huge financial burden on the government.
According to the report by AMBIT Capital, ‘The government may consider a higher salary increase for the purpose of increasing consumption, but 54% increase like 6th Pay Commission seems to be possible.’
Mid-range may increase 30-34%
According to AMBIT analysis, a ‘mid-range’ increase of 30–34% is estimated, which the government and the commission can consider. According to the report, the worst condition may increase by 14.3% and the best position may increase by 54%. Keeping this in mind, three possible fitment factors have been fixed- 1.83 (minimum), 2.15 (media), and 2.46 (maximum).
Possible new salary on ₹ 40,000 basic salary
If an employee has an existing basic pay ₹ 40,000, then the 8th Pay Commission may have a possible total salary (including basic + DA) according to the different fitment factor in the 8th Pay Commission:
DA is possible to increase by 60%
The report also states that currently dearness allowance (DA) is around 55% and by the end of 2025 it can reach 60%. In such a situation, a salary growth of at least 14% is considered to be fixed under the 8th Pay Commission, which is according to the trends of the last four pay commissions. Government employees and pensioners are still waiting for the formation of the 8th Pay Commission and the announcement of its terms of reference.
What is a fitment factor?
The Fitment Factor is a multiplier that is used to decide the new salary of government employees when the new Pay Commission is applicable. It is imposed on the existing basic pay so that the revised salary (basic + da etc.) can be fixed.
For example, if the basic salary of an employee is ₹ 40,000 and the fitment factor 2.15 is fixed, then his new total salary will be around ₹ 1,09,000. It is a way to increase salary, which the Pay Commission presents as a recommendation.