8th Pay Commission: What 2.86 fitment factor means for central govt employees' salary hike

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As the suspense builds over the formal announcement of setting up of the 8th Pay Commission, there are various reports indicating the debate around one key aspect of the CPC (Central Pay Commission) – fitment factor. This is because fitment factor is the key component of the formula that will help the officials to calculate the new pay structure for the millions of government employees. With rising inflation, some argue that the CPC will also modify the fitment factor.

As and when the new terms are announced, it will change the pay structure of over 50 lakh employees and 65 lakh pensioners.

One of the strongest chatters around the fitment factor is that the CPC is likely to take 2.86 under the 8th Pay Commission. While there is no official announcement, the analysts argue that considering current inflation and past trends, 2.86 seems to be the most plausible multiplier in the 8th Pay Commission calculation formula.

So, if the CPC decides to take 2.86 fitment factor that would mean a hefty hike. The formula for calculating new hike based on fitment factor is simple. This is – basic pay of the government employee multiplied by fitment factor.

Basic pay X fitment factor = new hike

Hence, if basic pay is say 10,000 and CPC decides on 2.86 as fitment factor then the new hike will be: 2.86X10,000=28,600.

Under the 7th Pay Commission, which will expire in December this year, the officials had fixed 2.57 as the fitment factor. So, any increase in this will directly result in exponential hike in the salary of the staff.

For now, the focus remains on the Centre announcing its decision of ‘term of reference’ regarding 8th Pay Commission. There were some reports that the TPR may be announced by March-end and new CPC will be announced in first week of April.