8th Pay Commission: What does 2.86 fitment factor push mean for salaries? What’s govt position?

Amid speculations over the constitution of the 8th Pay Commission, government employee unions have reportedly outlined their expectations for a substantial salary revision. The staff side of the National Council of Joint Consultative Machinery (JCM) is reportedly expecting a fitment factor of 2.86 for the next revision in salaries of government employees.

Shiv Gopal Mishra, the secretary (staff side) of the NC-JCM, said the employee union will demand a fitment factor of at least 2.86 after the 8th Pay Commission is formed, reported NDTV Profit.

Pay Commission reviews and recommends changes to the salaries and benefits of central government employees, while the national council of JCM deals with matters that affect the employees, such as pay and allowances.

The 7th Pay Commission had recommended a fitment factor –a multiplier applied to the existing basic pay to calculate revised salaries and pensions– of 2.57, raising the minimum basic pay of central government employees from ₹7,000 to ₹17,990. The employee unions had demanded a 3.68 fitment factor.

Given the pace of inflation, Mishra said the employees this time expect a higher fitment factor than the last pay panel’s recommendation, according to the report.

If accepted, the minimum basic salary of central government employees will increase from ₹17,990 to ₹51,451.

While the 7th Pay Commission recommendations were implemented in 2016, the timeline for the 8th Pay Commission remains uncertain.

During the Budget Session this year, the finance ministry reiterated that there was no such proposal under consideration despite the government receiving two representations for the constitution of 8th Pay Commission.

According to NDTV Profit, the staff side of NC-JCM recently met finance secretary Tuhin Kanta Pandey to raise the demand for the formation of the 8th Pay Commission.

"We told him that India's GDP is advancing at a strong pace, all sectors are growing, and the overall economic conditions are upbeat. There is no reason why the 8th Pay Commission should not be formed now," Mishra was quoted as saying.

The implementation of pay commission recommendations usually has a ripple effect on the economy. With higher salaries and pensions for central government employees, there is a boost in disposable income, potentially spurring consumer spending.

However, it also adds a burden on the government exchequer. With over 35 lakh central government employees and 68 lakh pensioners, even a modest hike in salaries and pensions significantly increases government expenditure.