Suggestions have been sought from employees and other stakeholders on behalf of the 8th Pay Commission. Meanwhile, a question remains a topic of constant discussion among the central government employees – will there be a higher increase in salary in the next pay review compared to the 7th Pay Commission or not? While employee unions are demanding a much higher ‘fitment factor’, experts say the final hike could largely depend on one key element: dearness allowance. When the new salary structure will be implemented, what will be the level of dearness allowance? This is going to be a very important topic. Let us try to understand this discussion in detail…
Why does fitment factor matter?
One of the most important elements determining salary review under the Pay Commission is ‘Fitment Factor’. Fitment factor is basically a ‘multiplier’, which is applied on the existing basic salary to calculate the revised salary. In the 7th Pay Commission, the fitment factor was fixed at 2.57. For example, earlier the minimum basic pay was Rs 7,000. After applying the multiplier of 2.57, the revised minimum pay for a Level-1 government employee was fixed at Rs 18,000. At the upper level, the salary of senior officers increased to Rs 2.5 lakh per month. Under the upcoming 8th Pay Commission, the biggest question is what this multiplier will be.
Why is the role of DA important in deciding the multiplier?
A key factor in determining the fitment factor is the level of Dearness Allowance (DA) when the new Pay Commission recommendations are implemented. Generally, the accumulated DA is merged into the basic pay before the new multiplier is applied. This combined DA becomes the basis for calculating the revised salary structure. For example, if the DA at the time of implementation is considered to be around 60 per cent, then this figure becomes the starting point while deciding the new fitment factor.
Why the multiplier cannot be very high in the 8th Pay Commission
The current DA level could perhaps be one of the biggest reasons why employees may have to settle for a relatively low fitment factor. When the 6th Pay Commission ended and the 7th Pay Commission was implemented, DA had already reached about 125 percent. This higher base of DA gave the Commission an opportunity to restructure the pay structure more effectively.
In contrast, under the 7th Pay Commission, DA currently stands at 58 percent. Even if there are some more changes before the recommendations of the 8th Pay Commission are implemented, DA will probably reach around 6870 percent. Because the base of DA is much lower than at the time of change from 6th to 7th Pay Commission, experts say that the scope for a very large multiplier may be limited. In simple words, the lower the DA base, the less scope there is for major changes in salary.
What are the employee unions demanding?
The employee organizations are demanding a much higher fitment factor in the 8th Pay Commission. The Federation of National Postal Organizations (FNPO) has proposed a multi-level fitment factor between 3.0 to 3.25 to remove disparities in pay at different levels.
According to the proposal:
Level 15: Fitment Factor 3.0
Level 612: Fitment Factor 3.05 to 3.10
Level 1313A: Fitment Factor 3.05
Level 1415: Fitment Factor 3.15
Level 16: Fitment Factor 3.2
Level 1718: Fitment Factor 3.25
Employee representatives argue that such a phased structure will ensure a meaningful increase in salaries at the junior and senior levels.
Different reports indicate different scopes
Additionally, various reports and expert estimates indicate a wide range of potential fitment factors. Some estimates suggest that the multiplier may be between 1.83 and 2.57, which is roughly in line with previous revisions. Other reports suggest that if workers’ demands are met, this factor could rise to 3.0 or even 3.25. The final figure will depend on several factors, including inflation trends, government finances, pay parity with the private sector, and the methodology adopted by the Commission to integrate DA with basic pay.
Timeframe: When can the 8th Pay Commission be implemented?
The government announced the 8th Pay Commission in January 2025, but it will take time to implement. Typically, the process of consultation, proposal submission and final recommendations takes 18 to 24 months. It is expected that discussions with employee unions will accelerate by 2026, after which the Commission will finalize its proposals. For now, expectations are high among government employees, especially when the unions are demanding a fitment factor of up to 3.25. However, the lower level of DA compared to the previous Pay Commission changes can become a major hindrance. If this factor dominates the calculations, the 8th Pay Commission could lead to a significant increase in salaries — but not necessarily on the scale of discussions and expectations going on now.