return to news
  1. Upstox
    /
  2. News
    /
  3. Personal Finance News
    /
  4. Latest Updates
    /
  5. 8th Pay Commission: Hybrid fitment factor calculation system recommended by pensioners. Explained

Personal Finance News

8th Pay Commission: Hybrid fitment factor calculation system recommended by pensioners. Explained

Upstox
By Upstox News Desk

3 min read | Updated on March 17, 2026, 12:17 IST

Twitter Page
Linkedin Page
Whatsapp Page

SUMMARY

8th Pay Commission news: The pensioners’ body has suggested that the new pay panel adopt a hybrid system, including the Akroyd Formula and inputs from the 5th and 7th CPCs, to calculate the fitment factor.

8th cpc hybrid fitment factor

The 7th CPC recommended a pay structure based on the Aykroyd formula. | Image source: Shutterstock

Even as the 8th Central Pay Commission (CPC) has just started its work, various employees' and pensioners' bodies have been suggesting what fitment factor the new pay panel should recommend. For instance, the FNPO has suggested a fitment factor of 3. In 2025, a report said the fitment factor could be anywhere between 1.82 and 2.46.
Open FREE Demat Account within minutes!
Join now

While the final fitment factor will be revealed only when the 8th CPC submits its report to the Government, a pensioners' body has suggested the new pay panel should adopt a hybrid system, including the Akroyd Formula and inputs from the 5th and 7th CPCs, for calculating the fitment factor. It has also suggested considering a family unit of 4 members for this calculation. This article explains the proposal in detail.

The proposal has been submitted to the 8th CPC by the Railway Senior Citizens Welfare Society (RSCWS) in response to the pay panel's questionnaire.

Recently, the 8th CPC issued a questionnaire for stakeholders, seeking their response on 18 important issues.

"The fitment factor should aim at restoring real income lost due to inflation and structural distortions. For pensioners, a uniform and adequate fitment factor must be applied to ensure meaningful enhancement in basic pension," the RSCWS said in its submission to the 8th CPC chairperson dated March 14, 2026.

The pensioners' body has recommended that the 8th CPC consider a hybrid system of calculating fitment factor using Dr. Wallace Aykroyd’s formula followed by 7th CPC and the constant relative income approach followed by the 5th CPC.

In this system, consumption expenses towards regular consumable items, internet charges, premium towards health insurance should be made part of the calculation, while calculating the fitment factor.

The pensioner's body suggested the above in response to the following question of the 8th CPC:

Question: Salaries in Government have a distinct element of compensation for length of service (increment, usually annual), an element of neutralization for changes in cost of living/inflation (dearness allowance) & an element for higher responsibilities based on seniority/merit (pay scale on promotion). In that context, what do you think the "fitment factor" adopted by Pay Commissions should represent? What should such a fitment factor principally aim for?

The RSCWS has also submitted the following key suggestions:

  • Consumption unit per family to be considered as four.

  • Inclusion of healthcare inflation, digital connectivity costs, and insurance premiums.

  • Multiple fitment factors may be considered for different levels, but pension revision must maintain parity

How the 7th CPC used Akroyd formula

The 7th CPC recommended a pay structure based on the Aykroyd formula, which reflects the basic average cost of living in the country. The formula takes into consideration the changing prices of the commodities that constitute a common man’s basket, which the Labour Bureau at Shimla reviews periodically. Know more about how the 7th CPC calculated fitment factor here.
To add Upstox News as your preferred source on Google, Click here
For all personal finance updates, visit here

About The Author

Upstox
Upstox News Desk is a team of journalists who passionately cover stock markets, economy, commodities, latest business trends, and personal finance.

Next Story