8th Pay Commission: High fitment factor vs high increment rate; how salaries of Level 5-7 employees may change over 10 years

The growth in the basic salary of central government employees is determined by two key factors: the fitment factor and the annual increment rate. A high increment rate and a high fitment factor can considerably increase their basic pay in a commission. But what can happen if the 8th Pay Commission delivers a low fitment factor and increases the annual increment rate?

To see the difference, first know the fitment factor and the increment rate under the 7th Pay Commission and how they compare with a high increment rate and a high fitment factor.

In the 7th Pay Commission, the fitment factor is 2.57, and the annual increment rate is 3%. For the 8th Pay Commission, central government employee associations have been demanding a fitment factor of up to 4.38, while their demand for the annual increment rate is to increase it up to 7%.


Fitment factor recommendations for 8th Pay Commission

Most employees and pensioners organisations, including the National Council of the Joint Consultative Machinery (NC-JCM), have recommended a 3.833 fitment factor for employees. If that happens, a Rs 18,000 minimum salary under the 7th Pay Commission would rise to Rs 69,000 under the 8th Pay Commission.

However, many experts say the 8th CPC may decide on a fitment factor of up to 2.5. However, it will be known only when the government notifies the 8th Pay Commission report.

Organisation	Proposed minimum pay for 8th CPC	Proposed fitment factor for 8th CPC
National Council of the Joint Consultative Machinery (NC-JCM)	Rs 69,000	3.833
All India Defence Employees' Federation (AIDEF)	Rs 69,000	3.833
Federation of National Postal Organisations (FNPO)	Rs 69,000	3.833
All India New Pension Scheme Employees Federation (AINPSEF)	Rs 69,000	3.833
Indian Railways' Technical Supervisors' Association (IRTSA)	Multiple with minimum at Rs 52,560	2.92, 3.50, 3.80, 4.09, 4.38
Delhi government school teachers	Rs 47,210	2.62
Chennai GPO Pensioners	Rs 68,000	3.77
Bharat Pensioners Samaj (BPS)	Rs 69,000	3.833

Increment rate recommendations for 8th Pay Commission

Recommendations to the 8th Pay Commission about the fitment factor also vary. The popular demand is a 6% annual increment from the NC-JCM, the All India Defence Employees’ Federation (AIDEF), the Federation of National Postal Organisations (FNPO), among others. Some organisations such as the All India New Pension Scheme Employees Federation (AINPSEF) have recommended a 7% increment rate.

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%

High fitment factor vs high increment rate: Salary estimates for Level 5-7 employees

The basic argument behind recommending a high increment rate is that it will reduce the dependency on the 10-yearly basic salary revision through a pay commission. The AINPSEF says that with a 7% increment rate, the gross salary of a central government employee will double in 7-8 years.

Here, through estimates, we will show the difference in salaries of Level 5-7 employees’ basic pay in 1, 5 and 10 years at different increment rates and fitment factors. For calculations, we are assuming three conditions.

·2.57 fitment factor, 3% increment rate

·2.1 fitment factor, 7% increment rate

·2.57 fitment factor, 7% increment rate

Level 5 salary estimates under high increment rate vs high fitment factor

Level 5 basic pay as per the 7th Pay Commission= Rs 29,200

Path	Year 1 basic	Year 5 basic	Year 10 basic
2.57 fitment factor, 3%/yr increment	₹ 75,044	₹ 84,463	₹ 97,915
2.1 fitment factor, 7%/yr increment	₹ 61,320	₹ 80,378	₹ 1,12,734
2.57 fitment factor, 7%/yr increment	₹ 75,044	₹ 98,367	₹ 1,37,965

Level 6 salary estimates under high increment rate vs high fitment factor

Level 6 basic pay as per the 7th Pay Commission= Rs 35,400

Path	Year 1 basic	Year 5 basic	Year 10 basic
2.57 fitment factor, 3%/yr increment	₹ 90,978	₹ 1,02,397	₹ 1,18,706
2.1 fitment factor, 7%/yr increment	₹ 74,340	₹ 97,445	₹ 1,36,671
2.57 fitment factor, 7%/yr increment	₹ 90,978	₹ 1,19,254	₹ 1,67,259

Level 7 salary estimates under high increment rate vs high fitment factor

Level 7 basic pay as per the 7th Pay Commission= Rs 44,900

Path	Year 1 basic	Year 5 basic	Year 10 basic
2.57 fitment factor, 3%/yr increment	₹ 1,15,393	₹ 1,29,876	₹ 1,50,562
2.1 fitment factor, 7%/yr increment	₹ 94,290	₹ 1,23,595	₹ 1,73,348
2.57 fitment factor, 7%/yr increment	₹ 1,15,393	₹ 1,51,257	₹ 2,12,145

In the estimates, you can see that at a high increment rate, the salary growth may not be as high as with a high fitment factor and a 3% growth rate. But the gap narrows in 5 years, while in 10 years, a high annual increment rate leaves the payout of a high fitment factor way behind.

But how a high increment rate or the fitment factor impacts the payouts of employees will be known when the 8th Pay Commission report is implemented.