Big difference between 6th and 7th Pay Commission: Know why salary was increased less even after more fitment factor

These days, crores of central employees across the country are eagerly waiting for the recommendations of the 8th Pay Commission. On one hand, while the Commission is busy preparing its recommendations, on the other hand, employee organizations are strongly demanding from the government to fix the fitment factor more than before. The National Council Joint Consultative Machinery (NC-JCM) has even demanded a higher fitment factor of 3.83.

However, many financial experts believe that achieving such a high fitment factor may be a bit difficult. He estimates that the Commission can fix the fitment factor between 2.0 to 2.25. Although there is still a lot of time for the recommendations to be officially revealed, in the meantime this whole mathematics of ‘fitment factor’ remains the biggest topic of discussion everywhere. In such a situation, the big question that arises is whether higher fitment factor means that your salary will also increase in the same proportion? Let us know the complete and real calculation behind this.

After all, what is this ‘fitment factor’?

If we understand it in simple language, fitment factor is a type of mathematical coefficient i.e. multiplier. It is used by the Pay Commission to adjust the basic salary of government employees and pension of pensioners according to the new pay structure.

This coefficient is directly multiplied by the basic salary. That means, the bigger this number is, the basic salary also increases by that many times. Its biggest advantage is that it makes it very easy for the government to increase the salaries of all employees at different levels in a uniform and transparent manner. The thing to note is that the direct and main impact of the fitment factor is only on the basic salary. However, many other allowances like House Rent Allowance (HRA) are directly determined on the basis of basic salary, so their impact automatically changes as the basic increases.

Will the salary also increase as the fitment factor increases?

The answer to this question is clearly ‘no’. Common people often have this misconception that if the fitment factor is fixed at 2.57, then their total salary will directly increase by a huge 157%. But the reality is quite different from this.

The effect of fitment factor is visible only on the basic pay, whereas in the gross salary of any employee, apart from the basic salary, dearness allowance i.e. DA, house rent allowance i.e. HRA and many other allowances are also included.

What do the figures of previous pay commissions say?

If we look at the history of previous pay commissions, shocking figures emerge. Past records show that having a higher fitment factor does not mean that the total salary of the employee will also increase in the same proportion.

• 7th Pay Commission: In this commission, the fitment factor was fixed at 2.57, but according to the financial analysis, the overall increase in the gross salary of the employees was only 14.29%.
• 6th Pay Commission: In contrast, during the Sixth Pay Commission, the fitment factor was only 1.86, yet a massive increase of 54% was recorded in the gross salary of the employees.

Why does this happen? (Understand complete mathematics)

According to experts, the biggest game behind this is ‘Dearness Allowance’ i.e. DA. When the 7th Pay Commission was implemented, employees were already getting a whopping DA at the rate of 125%. This means that the old salary structure already had a large DA component attached to it. This is the reason that even after the implementation of the excellent fitment factor of 2.57, the increase in total salary remained quite limited.

In contrast, at the time of the Sixth Pay Commission, dearness allowance was only around 24%. This was the reason why the effect of small fitment factor of 1.86 appeared more powerful and there was a huge jump of 54% in the total salary of the employees.

How much can your salary increase in the 8th Pay Commission?

According to experts and financial estimates, if the fitment factor in the 8th Pay Commission is fixed between 2.0 to 2.57, then the gross salary of central employees from level 11 to level 18 may see an increase of about 31% to 68%. However, this is only a possible estimate at this time. The actual and final increase will depend entirely on what fitment factor the government approves in future and the actual position of Dearness Allowance (DA) and other allowances at that particular time.