8th Pay Commission: 7% annual increment vs high fitment factor? Which may give more salary to central government employees?

Some employee groups like the All India New Pension Scheme Employees’ Federation (AINPSEF), are pushing for a 7% annual increment from the 8th Pay Commission for the central government workers. Meanwhile, others like the National Council of the Joint Consultative Machinery (NC-JCM), the All India Defence Employees' Federation (AIDEF) and the Federation of National Postal Organisations (FNPO) have all recommended a 6% annual increment.

They believe that a higher increment rate would reduce the reliance on a high fitment factor in pay commissions and employees won’t have to wait for 10 years for a decent salary bump.

They point out that the annual increment under the 7th Pay Commission is just 3%, which doesn’t really benefit low-level employees much every year. A higher annual increment would fix this issue, as AINSPEF claims that employees’ basic pay will double within 10 years.


Also Read: 8th Pay Commission calculator: Why central govt pensioners seek 15-year commuted pension rule change

Employee bodies’ recommendations for annual increment from 8th Pay Commission

Organisation	Proposed annual increment
National Council of the Joint Consultative Machinery (NC-JCM)	6%
All India Defence Employees' Federation (AIDEF)	6%
Federation of National Postal Organisations (FNPO)	6%
All India New Pension Scheme Employees Federation (AINPSEF)	7%
Indian Railways' Technical Supervisors' Association (IRTSA)	5%

Source: Official memorandums submitted to 8th Pay Commission

But will a high annual increment rate be enough, or do employees still need a push from a fitment factor

Ramachandran Krishnamoorthy, associate partner, managed services, BDO India, says a one-time revision (fitment factor) front-loads a huge jump immediately, and even a much higher ongoing annual increment takes many years to catch up on cumulative earnings, if it ever does at plausible rates.

Also Read: 8th Pay Commission fitment factor: Does 2.0 fitment factor mean 2x gross pay hike for Level 1-18 employees?

Krishnamoorthy presents the case of a Level 10 employee (basic pay Rs 56,100) and compares two paths: a one-time fitment revision (like the 2.57x scenario) followed by normal 3% annual increments, versus staying on the old scale but with a permanently higher annual increment rate.

His projections show it may take decades before a higher increment rate overtakes the salaries supplemented with a high fitment factor and a 3% annual increment rate.

Path	Year 1 basic	Year 15 basic	Year 30 basic
One-time 2.57x revision, then 3%/yr	₹ 1,48,502	₹ 2,24,623	₹ 3,49,955
No revision, 5%/yr increment	₹ 58,905	₹ 1,16,628	₹ 2,42,461
No revision, 7%/yr increment	₹ 60,027	₹ 1,54,782	₹ 4,27,048
No revision, 10%/yr increment	₹ 61,710	₹ 2,34,344	₹ 9,78,911

Key takeaways according to Krishnamoorthy

• A one-time revision wins decisively in the short-to-medium term (first 10–20 years of a career), because it resets the base immediately — you don't have to wait for compounding to build up.

• A much higher increment (10%+, vs the current 3%) can eventually overtake a one-time revision in cumulative terms, but only after roughly 20–25 years, and only if that elevated rate is sustained the whole time — which historically doesn't happen (increments have hovered around 3% since the 6th CPC).

• In practice, the two aren't really substitutes: pay commissions bundle both — a one-time fitment jump plus the normal annual increment continuing on top of the new higher base.

According to projections, a high increment rate can help employees’ salaries keep pace with rising expenses, but it works best when combined with a fitment factor.