Good News! Government increases stir on 8th Pay Commission, big decision may come on fitment factor and OPS

New Delhi: A very big and good news is coming out regarding the 8th Pay Commission for central employees and pensioners. This time the discussion is not just about salary increase, but about that ‘magical formula’ which can take your basic salary much higher than expected in an instant. At the center of this entire change is the new definition of “Family Unit”, which will change the entire mathematics of minimum salary, fitment factor and your pension.

What is the ‘5 units’ formula and how will the salary increase?

Employee organizations have placed a very logical demand before the government. Till now, while fixing the minimum wage in the 7th Pay Commission, the model of ‘3 consumption units’ was adopted, in which the employee, his spouse and two children were considered as standard. But now there is a demand that this limit should be increased to ‘5 units’, so that the parents dependent on the employee can also be included in this calculation.

If the government gives green signal to this 5 unit model, then the basis of determining the basic salary will change. Mathematically speaking, going from 3 units to 5 units means an increase of approximately 1.66 times. This is the reason due to which technically there is a possibility of increase in salary by about 66%. This means that once the calculation structure is changed, the minimum basic pay of employees will reach a higher level.

There will be a big impact on fitment factor and pension

‘Fitment factor’ is the most important link in fixing the salary. In the 7th Pay Commission it was 2.57, but now the employee organizations are adamant on the demand of increasing it to 3.25 or more. Organizations argue that the old formula will not work in view of rising inflation and cost of living. If the expansion of the ‘Family Unit’ is approved, the demand for increasing the fitment factor will be further strengthened as the new salary matrix will stand on a higher base.

Retired employees will also get direct benefit from this. Since pension is usually 50% of the last basic salary, as the new salary matrix shifts up, pensioners will see a proportionate increase in their monthly income. This is the reason why pensioner organizations are also keeping their eyes on this issue.

Everyone’s eyes are on these main demands

NC-JCM has expedited the work of drafting the joint memorandum for the 8th Pay Commission. These points are at the top of the major demands of the organizations:

• Respectable increase in fitment factor.
• Proposal to increase the rate of annual increment.
• Reconsideration of restoration of Old Pension Scheme (OPS).

At present, the final decision on all these recommendations will be taken only after the report of the government and the commission, but this new problem of ‘family unit’ has created a new wave of hope among the employees.