8th Pay Commission: The Union Cabinet, under the leadership of Prime Minister Modi, convened on Thursday and approved the establishment of the 8th Pay Commission, as announced by Union Minister Ashwini Vaishnav. It is commonly understood that the implementation of a new Pay Commission typically results in salary increases for employees. However, the extent of these salary increments following the recommendations of the 8th Pay Commission remains to be determined. What methods will be employed to calculate these adjustments?
The 7th Pay Commission was implemented on January 1, 2016, and is set to conclude on December 31, 2025. Following this period, a new pay scale will be introduced, accompanied by a revised fitment factor. This factor will serve as the basis for determining salaries and pensions. While the formation of the 8th Pay Commission has been sanctioned by the Center, specific guidelines have yet to be issued. Recommendations regarding salary adjustments will be made shortly after the Commission’s establishment.
Fitment factor will play a crucial role
The fitment factor will play a pivotal role in this process. It serves as a fundamental mechanism for uniformly applying salary increases across various pay grades, ensuring that employees can sustain their living standards amid rising costs. The minimum wages for central government employees and pensioners will be calculated by multiplying their current wages by the fitment factor.
Probable calculation
To illustrate this, consider an employee whose current basic salary is Rs. 40,000. If the fitment factor is set at 2.5 percent following the 8th Pay Commission’s implementation, the employee’s minimum wage would rise to Rs. 1 lakh (40,000 x 2.5 = 1,00,000). It is important to note that the Dearness Allowance (DA) will not be disbursed initially but will be credited after a few years. Additionally, significant changes are anticipated in other allowances.
CPC Real increase in pay
- 2nd 14.20%
- 3rd 20.60%
- 4th 27.60%
- 5th 31%
- 6th 54%
- 7th 14.30%