8th Pay Commission: Ever since the government announced the new pay commission, there has been an ongoing debate around the fitment factor, basis of which the revision in the salary and pension of central government employees and retirees will be decided.
As reports suggest, the fitment factor under the 8th Pay Commission could be anywhere between 1.92 and 2.86. The fitment factor is a multiplier used to revise the salary and pension of employees by the government. But there is a misconception around the applicability of the fitment factor. It is wrongly believed that if the 8th Pay Commission opts for 2.86 as the fitment factor, the salary and pension would be hiked by as many times. In reality, the fitment factor is applied to the basic salary and not to the gross salary of an employee.
Also read: 1st to 7th Pay Commission: Maximum basic pay jumped to Rs 56,100! Now what will be Level 10 salary under 8th pay panel?
Why do salaries and pensions not rise in proportion to a hike in basic pay?
The reason why the gross salary does not reflect the same multiplier effect of fitment factor as the basic pay because the overall remuneration includes so many other components also. While revising the salary and pension, the pay panel takes into consideration many other aspects, like merging DA with the basic pay and adding or removing several allowances. This ensures that the fitment factor calculation will only be applicable for the basic pay.
For example, the fitment factor considered under the 7th Pay Commission to revise the salary and pension was 2.57, which resulted in the basic pay going up from Rs 7,000 to Rs 18,000. But when it came to the actual increase, the average overall hike in the salaries and pensions for employees under Levels 1-3 was around 15%. Though the hike was higher for employees under Levels 4–10.
Also read: How much time will 8th Pay Commission take to submit its report? Govt says THIS
On the other hand, the hike was much higher at 54% under the 6th Pay Commission, which recommended 1.86 as the fitment factor. So it is clear from past instances that the higher fitment factor doesn’t guarantee a proportionate hike in the overall remuneration of a government employee or pensioner.
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