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8th Pay Commission: The Fitment Factor is a multiplier used to determine the new basic salary by multiplying it by the existing basic salary. Its purpose is to balance the impact of inflation and maintain the real income of employees.

8th Pay Commission: The central government has recently approved the Terms of Reference (ToR) for the 8th Pay Commission. This has raised hopes of a salary and pension increase for approximately one crore central government employees and pensioners. The basis for the salary increase in this pay commission will be an important formula called the Fitment Factor. In simple terms, this factor determines how much the existing basic salary will increase.

What is the Fitment Factor?

The Fitment Factor is a multiplier used to determine the new basic salary by multiplying it by the existing basic salary. Its purpose is to balance the impact of inflation and maintain the real income of employees.

How will the Fitment Factor be determined in the 8th Pay Commission?

The 8th Pay Commission will determine the Fitment Factor keeping several important factors in mind, such as:

Inflation in the past years
The decrease in the purchasing power of employees
The economic condition of the government
The need to retain qualified people in government services

According to tax experts, the last salary revision took place about 10 years ago, and household expenses have increased significantly during this period. Therefore, it will be necessary to balance the salary in the new pay commission according to the current situation.

What could be the Fitment Factor in the 8th Pay Commission?

Currently, the government has not announced any official figures, but according to initial estimates, the Fitment Factor could be between 1.83 and 2.57. If the upper limit, i.e., a Fitment Factor of 2.57, is implemented, then employees and pensioners can expect a significant increase in their salaries and pensions.

What was the Fitment Factor in the 7th Pay Commission?

The Fitment Factor in the 7th Pay Commission was 2.57. However, this did not mean that the entire salary was directly multiplied by 2.57. This factor was applied only to the basic pay. It's also worth noting that when a new pay commission is implemented, the Dearness Allowance (DA) is reset to zero, as the inflation index is reset. The same process may be followed in the 8th Pay Commission as well.

What's in it for the employees?

If the fitment factor is kept higher in the 8th Pay Commission, it will directly benefit employees' monthly salaries, pensions, and other allowances. This is expected to provide significant relief to government employees amidst rising inflation. In simple terms, the 8th Pay Commission is poised to strengthen both the finances and future of government employees.

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