The long-awaited 8th Pay Commission has now finally been approved by the Central Government in January 2025, resulting in relief and gloom for 48 lakh central government employees and 67 lakh pensioners. Acceptance of the proposal is a welcome relief, but a recent update has left many aghast, fearing a reduction in salary revision fitment factor.
What is the Big Shock?
Central employees were hopeful of a good salary hike with a fitment factor of 2.86. They were citing a huge 186% salary increase. These hopes have been dashed by Garg, who served as Finance Secretary in the past, claiming that fitment factor 2.86 was akin to asking for the moon. According to him, a realistic fitment factor in the 8th Pay Commission would be something between 1.92 and 2.08, which would mean a 10% to 30% increase in basic salaries.
How Much Will Salaries Increase?
Currently, a central basic salary is a minimum of Rs 18,000 per month, with an additional 53% dearness allowance (DA). But before the implementation of the 8th Pay Commission, two more DA rises of 3% in each case would happen for employees, making it a total of 59 %.
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With the implementation of the 8th Pay Commission, the basic salary and DA will be merged. Here’s how you will calculate the new salaries:
- Rs 18,000 + 69% = Rs 30,420 per month (10% Increase)
- Rs 18,000 + 99% = Rs 34,020 per month (30% Increase)
This is indeed a good deal; however, it does not do justice to the Rs 51,480 sought for the fitment factor 2.86 by the employees. Similarly, pensioners with a minimum amount of pension of Rs. 9,000 would now receive an amount close to Rs. 25,740 against a higher fitment factor. This now seems unlikely.
Why the Fitment Factor of 2.86% is Unrealistic
The recommendation for a fitment factor of 2.86% was put forward by Shiv Gopal Mishra during his tenure as Secretary, of the National Council of Joint Consultative Machinery (NC-JCM). This, he said, may lead to an 186% salary increase, a miracle for the financial well-being of all employees and pensioners. Economists like Subhash Chandra Garg, however, clarified that such a high fitment factor is impractical in the straitjacketed economic framework and the government has fiscal responsibilities.
What Does This Imply for Employees and Pensioners?
The truth is that the 8th Pay Commission has brought good news but not as much as what actual absorbers expected. Life-changing aspirations were raised among employees and pensioners through their dreams for salary hikes, which will remain little more than dreams.
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