The Union Cabinet of India has decided to revise the salaries and pensions of the Central Government employees under the 8th Pay Commission. This amendment has already been approved and is likely to be executed by next year. However, the current salary structure of the central employees is based on the recommendation of the 7th Pay Commission which was implemented back in 2016. In this article we will be sharing all the necessary details related to the 8th pay Commission, fitment factors, increment in the salary, etc.
What is the Fitment Factor?
Fitment is a necessary factor that acts as a multiplier to be applied to the basic salary of the employee and the salary revision somewhat depends on the fitment factor. With the help of this, we can determine the new pay by multiplying the fitment factor with the old pay. The fitment factor was revised by the Government and under the 7th Pay Commission, the fitment salary was 2.57, which resulted in the salary of Level 1 employees from INR 7,000 – INR 18,000. However, the total salary becomes INR 36,020 while considering dearness allowance, house rent allowance, transport allowance along other benefits. There will be a specific amount of salary increment for the Central Government employees, though the specific percentage is not yet released we can predict the percentage based on the previous year’s recommendations. It is expected that the exact percentage for the 8th Pay Commission will be released soon. Once announced, then the salary and pension revision will be discussed with the stakeholders increasing the salary of the Central Government employee of India.
8th Pay Commission Fitment Factor
According to the recent report, it is defined that the recent fitment factor 8th Pay Commission is 2.86 which results in the fluctuation of salary from INR 18,000 – INR 51,480. Moreover, this structure applies to all levels.
- Level 1 consists of workers like peons, support staff, and attendants, and their salary is likely to be increased from INR 18,000 – 51,480 which shows an increment of INR 33,480.
- Level 2 consists of clerical staff of the lower division and their salary is likely to be increased from INR 19,900 – 56,914, which leads to an increment of INR 37,017.
- Level 3 consists of Constable and skilled staff of public service or police and their current pay is 21,700 which is likely to be increased up to INR 62,062, which defines the increment of INR 40,362.
- Level 4 consists of Junior clerks and Grade D stenographers and their current pay is INR 25,500 which is likely to be increased up to INR 72,930, which defines the increment of INR 47,430.
- Level 5 consists of Senior clerks and higher-level technical staff and their current pay is INR 29,200 which is likely to be increased to INR 83,512, which defines the increment of INR 54,312.
- Level 6 consists of Sub – inspectors and Inspectors and their current pay is INR 50,00 which is likely to be increased to INR 1,01,244, which defines an increment of INR 65,844.
- Level 7 consists of superintendents, assistant engineers, and section officers and their current pay is INR 47,600 which is likely to be increased to INR 1,28,414, which defines an increment of INR 83,514.
- Level 8 consists of assistant audit officers and section officers and their current pay is INR 47,600 which is likely to be increased to INR 1,36,136, which defines the increment of INR 98,766.
- Level 9 consists of account officers and Deputy Superintendents and their current pay is INR 53,100 which is likely to be increased to INR 1,51,866, which defines an increment of INR 98,766.
- Level 10 consists of Group A officers such as Entry level officers in civil services and their current pay is INR 56,100 which is likely to be increased to INR 1,60,446, which defines the increment of INR 1,04,346.
Example of 8th pay commission salary calculation
Fitment factor is the major component of 8th pay commission as it is a multiplier applied to the current basic salaries of the employees and creates a new basic pay. here is an example of salary calculator as per 8th pay commission
Let’s take a case, where:
- Current basic pay – Rs. 60,000
- Expected fitment factor – 2.28
- Expected DA rate – 5%
- City classification for HRA – x (24% HRA)
- Other allowances – Rs. 5,000
Steps For Calculation
1) Revised basic salary
revised basic pay = current basic pay x fitment factor
60,000 x 2.28 = Rs. 1,36,800
2) Dearness Allowance (DA)
DA = revised basic pay x DA rate
Rs. 1,36,800 x 5% = Rs. 6,840
3) House Rent Allowance (HRA)
HRA = Revised basic pay x HRA rate
Rs. 1,36,800 x 24% = Rs. 32,832
4) Gross Salary
Gross salary = Revised basic pay + DA HRA + other allowance
Rs. 1,36,800 + Rs. 6,840 + Rs. 32,832 + Rs. 5,000 = Rs. 1,81,472
5) Salary Increase
Salary increase = Gross salary (Post-Revision) – Current Gross salary
Let the current gross salary be Rs. 1,17,200Salary increase will be = Rs. 1,81,472 – Rs. 1,17,200 = Rs. 64,272
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Aykroyd Formula and Salaries
Aykroyd Formula is introduced by a famous nutritionist Dr. Wallance Aykroyd, in which he determines the minimum cost of living for a human being. In this formula, he determines that the salaries and wages should be set based on the nutritional requirements of an average worker. Aykroyd Formula focuses on the basic requirements such as food, shelter, and clothing and institutions should keep these factors in mind while establishing wages. This formula was adopted back in 1957 by the Indian Labor Conference (LIC) to establish a regular income for the individual, his/her spouse, and their two wards.
1) 7th Pay Commission and Aykroyd Formula
Under the 7th Pay Commission, the average salary for Central Government employees has increased up to INR 7,000 – 18,000 under the application of the Aykroyd Formula. The salary increments were made while taking the cost of living and nutritional necessities into consideration. 10 years back, the 7th Pay Commission applied the fitment factor of 2.57 to increase the salary and pension of Central government employees. Since the implementation of the 7th Pay Commission in 2016, Pay Matric has been an effective tool for all workers. The pay Matrix helps in establishing a designated pay level and annual stride with the help of the Aykroyd Formula for calculating the minimum pay.
2) 8th Pay commission and Aykroyd Formula
The approaching 8th Pay Commission is likely to adopt a similar methodology by connecting the 7th Pay Commission and Aykroyd Formula and newly generated market data In such a way to ensure that government salaries are kept in a way that the current living costs and governmental salaries remain together. According to recent reports, it is expected that the fitment factor may fluctuate between 1.92 to 2.86. If 2.86 is selected then the minimum basic pay for the central government employees is likely to increase up to 51,480 from the INR 18,000. Moreover, the pension rate may increase up to 25,740 from the basic pay of INR 9,000.
FAQs
1) Is the 8th Pay Commission coming?
It is expected that the 8th Pay omission is likely to be applied from 15th February 2025. The report of the Commission is already finalized on 30th November and the Government will take the other reviews into consideration from January 2026.
2) Who is the Chairman of the 8th Pay Commission?
The Chairman of the 8th Pay Commission is Ashok Kumar Mathur who was the former judge of the Supreme Court of India.
3) What is the DA allowance?
The DA or Dearness Allowance is the cost of living that is provided to the employees of the Central Government of India. The Government provides the DA to the employees.
4) What Is the Period of the Pay Commission?
The period for every Pay Commission is 10 years.
5) What is the full form of VDA?
The full form of VDA I Variable Dearness Allowance (VDA).
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