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The fitment factor revises government salaries and pensions by applying a multiplier to basic pay. It ensures periodic adjustments as per Pay Commission recommendations. This helps to counter inflation and improve employees’ economic conditions
Numerous factors contribute to the determination of the fitment factor like the prevailing inflation rate and the requirements of employees. (Representative/Shutterstock)
The central government has decided to establish an 8th Pay Commission to revise the salaries of central government employees. In this context, it is important to understand that the crux of any salary increase lies in the fitment factor, which serves as the basis for determining salary hikes.
When the Narendra Modi government approved the 7th Pay Commission, employees saw a substantial increase in their basic salaries. The minimum basic salary rose from Rs 7,000 to Rs 18,000, resulting in a significant rise in total salaries. This increase was determined using a fitment factor of 2.57, which meant salaries were to be multiplied by 2.57 under the new pay commission. This calculation led to the base salary increasing from Rs 7,000 to Rs 18,000.
Before that, the fitment factor was 1.86 during the 6th Pay Commission. This meant the basic salary was to increase by 1.86 times (slightly less than double) in the 7th Pay Commission.
With the 8th Pay Commission, one certainty is that the fitment factor, previously 2.57, will be at least as much. However, with the establishment of the new commission, this factor could increase. According to some reports it may rise to 2.86 from 2.57. However, many employee unions are demanding an increase to 3.68.
If the new pay commission is implemented according to the 2.86 fitment factor, the minimum basic salary of Rs 18,000 will increase to Rs 51,480. Consequently, overall salaries will see a proportional increase. This rule will also apply to pensioners; the minimum pension of Rs 9,000 will rise to Rs 25,740. If a fitment factor of 3.68 is accepted, the increase will be even more substantial.
When will the 8th Pay Commission be implemented?
The 8th Pay Commission is believed to be implemented from January 2026, coinciding with the deadline of the 7th Pay Commission. Prior to implementation, consultations with all stakeholders and government bodies will take place. Union Minister Ashwini Vaishnaw announced on Thursday that the government will soon reveal the names of the Eighth Pay Commission’s chairman and two members, ensuring ample time for comprehensive consultations.
What is the fitment factor? How is it decided?
The fitment factor is a formula used to revise the salaries and pensions of government employees and pensioners. It adjusts employees’ basic salaries to new pay scales by increasing them by a specific multiplier. Determined based on the recommendations of each Pay Commission, the fitment factor is subject to periodic adjustments. Its main objective is to improve employees’ economic conditions and maintain their purchasing power against rising inflation.
Numerous factors contribute to the determination of the fitment factor. Considerations include the government’s economic status, the prevailing inflation rate, and the requirements of employees.
The Pay Commission reviews the pay scale and allowances of government employees and determines a multiplier. For example, the 7th Pay Commission fixed the fitment factor at 2.57. This means the new salary of an employee was decided by multiplying their basic salary by 2.57. If the basic salary of an employee is Rs 15,000, then with a fitment factor of 2.57, they will get a new basic salary of Rs 38,550. This new salary is also determined by taking into account the dearness allowance (DA) and other allowances.
The fitment factor directly impacts employees’ gross salaries and pensions. When the fitment factor increases, it not only raises salaries but also benefits pensioners. Additionally, it helps maintain balance against rising inflation. This is why employee unions periodically demand an increase in the fitment factor.
