Minimum basic salary will increase from Rs 18,000 to Rs 69,000?
The murmur regarding the 8th Pay Commission for central employees has intensified. New updates are coming out every day, but the biggest discussion is on what will be the basis of the new salary. Will it be decided only by the ‘fitment factor’, or will the new formula of ‘5-member family’ prove to be a game changer?
Employee organizations have placed a big demand before the government to change the existing ‘3-unit family model’ of fixing the minimum wage. It has been proposed to make it 5-unit. If the government gives green signal to this proposal, then there can be a historic increase in the basic salary of central employees. Let us understand this entire mathematics in detail.
What is the mathematics of the 3-unit formula?
At present, the formula by which the minimum salary of employees is decided is called 3-unit family model. In the 7th Pay Commission, the minimum basic salary was fixed at Rs 18,000 on this basis. In this model it is assumed that a family consists of an employee, his spouse and two children. After this, other allowances including Dearness Allowance (DA), House Rent Allowance (HRA) are added to this basic pay. This forms the final take-home salary of the employee.
New proposal of 5 members will change the picture
With time the needs and expenses of the family have increased rapidly. In view of this, the employee organization ‘National Council of Joint Consultative Machinery’ (NC-JCM) has advocated changing the method of determining salaries. The organizations have a clear argument that in today’s era, employees also have the responsibility of their elderly parents. Therefore, in the new model, the employee, spouse, two children as well as dependent parents should be considered as one unit. That is, a new salary structure should be prepared considering the overall family as 5 units.
How big a jump will be seen in salary?
The final measure of salary increase is always fitment factor only occurs. This is the multiplier by which the existing basic pay is converted into the new basic pay. In the 7th Pay Commission it was 2.57. Earlier there were discussions from 2.1 to 2.86 regarding the new commission. But, with the demand for 5-unit model, employee unions have demanded a fitment factor of 3.83.
Also read- 8th Pay Commission: Government’s big preparations, before the July meeting, employees put forward these 5 big demands
If the government approves the 5-unit model and this higher fitment factor, the minimum basic salary may jump from Rs 18,000 to around Rs 69,000. This will have a direct impact on entry level employees. When DA and HRA are added to the new basic pay, the total monthly salary is expected to reach Rs 1.24 lakh.
Eyes fixed on the final decision of the government
Currently, suggestions are being taken from different parties and employee organizations for the 8th Pay Commission to be implemented in January 2026. The 5-unit family model is a demand of the unions right now. There is no official seal on this. The government will also have to keep in mind fiscal deficit and financial burden while taking decisions. It is expected that the government will take a balanced approach in this matter, but one thing is certain that the chances of employees getting a solid pay hike in the 8th Pay Commission have become quite strong.
