Eighth Pay Panel may stay cautious on fitment factor

New Delhi: The Eighth Central Pay Commission may take a cautious approach to the fitment factor, given the fiscal burden on both the Centre and states, as it enters the final phase of consultations with state governments.

While the Commission hasn't yet finalised its recommendations, early discussions suggest that the fitment factor could remain close to the 2.57 multiplier adopted by the Seventh Pay Commission, even as employee unions continue to push for a higher revision.

The fitment factor, which determines the multiplication of existing basic pay and pensions to arrive at revised pay levels, remains the most critical element of the pay revision exercise.


"The exercise is now veering to discussions on the likely range of the fitment factor, consultations with state governments, and assessment of the fiscal impact of revised pay and pension structures," a senior government official aware of the discussions told ET.

The assessment of financial burden on both the Union and state governments is likely to be a decisive factor in shaping the final framework.

In their submissions, government employees have sought a sharp increase, including a 3.83 multiplier and a minimum basic salary of ₹69,000.

The memorandum submission process closed June 15, marking the end of formal representations from employee associations, pensioners, and other stakeholders. The Commission will now review these submissions alongside inputs gathered from states, starting with Uttar Pradesh, Odisha and West Bengal.

These follow earlier rounds of meetings across Delhi, Ladakh, Jammu and Kashmir, Telangana, Maharashtra, and other regions as part of a nationwide stakeholder outreach.

Once the remaining consultations conclude, the panel is expected to move into consolidation of inputs before drafting its report, which will set the revised pay and pension structure for central government employees and pensioners.

The Seventh Pay Commission introduced a fitment factor of 2.57 that raised the minimum basic pay from ₹7,000 to ₹17,990 while increasing the revenue expenditure of the Centre to 9.9% in fiscal year 2016-17 from 4.8% in 2015-16.