8th Pay Commission: Central employees have their eyes fixed on the fitment factor, know how much your basic salary and HRA will increase if the coefficient of 2, 2.5 and 3 is implemented. – ..

New Delhi/Business Desk: Curiosity is at its peak among lakhs of central government employees and pensioners regarding the 8th Pay Commission. After the announcement of formation of the commission by the government, now the biggest curiosity remains regarding ‘Fitment Factor’. The fitment factor will be the main formula or basis through which the new basic salary and all future allowances of central employees will be decided. The higher the fitment factor figure, the more the employees’ take-home salary and their House Rent Allowance (HRA) will also jump in the same proportion. However, the final rate of fitment factor is yet to be approved by the government.

After all, what is fitment factor? Understand its mathematics in simple language

The fitment factor actually works like a ‘multiplier’. The basic salary of the new pay commission is arrived at by multiplying the existing basic salary under the Seventh Pay Commission by this fixed multiplier.

For example: If the current basic pay of an employee is Rs 20,000 and the fitment factor is fixed at 2.50 in the upcoming pay commission, his new basic salary will directly increase to Rs 50,000 ($20,000 \times 2.5$). This new increased basic salary later becomes the new basis for calculating your Dearness Allowance (DA), HRA and Provident Fund (PF).

Complete multiplication of fitment factors of 2, 2.5 and 3

According to the assessment of experts and employee organizations, the change in salary at different scales of fitment factor will look like this:

• If fitment factor 2 is fixed: In this situation, the existing basic salary of the employees will be directly doubled. However, employee organizations are considering it low.

• If fitment factor fixed at 2.5: Under the middle path, if this factor 2.5 is implemented, then there will be a respectable and big jump in the salary. Most of the experts are expecting this range.

• If fitment factor 3 is determined: If the government accepts the demand of the employees and fixes it at 3, then there will be a bumper historic increase in the basic salary and HRA of all the employees from Level-1 to Level-13 of the pay matrix.

There will be a bumper increase in HRA along with basic salary.

The biggest lottery effect of increasing the fitment factor is on the House Rent Allowance (HRA) of the employees. Since HRA is calculated on top of the basic salary at the rate of 27%, 18% and 9% respectively according to the category of the city (X, Y and Z), hence as the graph of basic salary goes up due to the fitment factor, the amount of HRA received will automatically increase manifold. This is the reason why all the central employee organizations of the country are pressurizing the government to keep maximum fitment factor, so that their total monthly income can improve significantly.

After the announcement of formation, now waiting for final notification

The Central Government has given the green signal to the formation of the Eighth Pay Commission, but the final approval of the Cabinet is yet to be received on the official appointment of its members, terms of reference and the final formula of fitment factor. There is a strong demand of the employee unions that in view of this period of inflation, the fitment factor should be kept at least between 2.5 to 3. At present, the eyes of more than 48 lakh serving employees and more than 67 lakh pensioners of the country are now fixed on the upcoming recommendations of the Commission and the final decision of the government.