Why the 8th CPC (Pay Commission) Fitment Factor Must Be 2.57 or Higher
8th Pay Commission: Why the Fitment Factor Must Be 2.57 or Higher
The recent approval for the formation of the 8th Pay Commission has reignited discussions on key aspects of salary and pension revisions for central government employees and retirees. Among the most crucial components of these discussions is the fitment factor, which determines the increase in base salaries and pensions. According to Shiv Gopal Mishra, Secretary (Staff Side) of the National Council-Joint Consultative Machinery (NC-JCM), the 8th Pay Commission should recommend a fitment factor of at least 2.57 or higher.
Understanding the Fitment Factor
The fitment factor is a multiplier used to revise the base pay of government employees during each Pay Commission cycle. In the 7th Pay Commission, a fitment factor of 2.57 was recommended, which resulted in a minimum salary increase from Rs 7,000 to Rs 18,000 and a minimum pension hike from Rs 3,500 to Rs 9,000.
Mishra strongly believes that the fitment factor cannot be less than 2.57, given the increasing cost of living and inflation rates. In a recent conversation with NDTV Profit, he emphasized that the 8th Pay Commission must propose a higher multiplier, possibly around 2.86, to align with modern economic realities.
Demand for a Higher Fitment Factor (2.86)
If the 8th Pay Commission recommends a fitment factor of 2.86, it will significantly impact salaries and pensions:
Minimum salary increase: From Rs 18,000 to Rs 51,480
Minimum pension increase: From Rs 9,000 to Rs 36,000
However, former Finance Secretary Subhash Garg has expressed skepticism, stating that demanding a fitment factor of 2.86 is unrealistic and is akin to "asking for the moon." According to him, the fitment factor might be closer to 1.92.
The Justification for 2.57-Fitment Factor
Mishra supports his stance on maintaining or increasing the fitment factor by citing the foundations used by the 7th Pay Commission:
15th Indian Labour Conference (ILC) Resolutions (1957):
This approach focuses on need-based wage calculations, ensuring a decent standard of living.
It takes into account a worker's fundamental needs such as food, clothing, shelter, education, healthcare, and other daily necessities.
Dr. Wallace R. Aykroyd's Formula:
Developed by an American nutritionist, this formula considers the price increase of essential commodities.
It was instrumental in setting the 7th Pay Commission’s fitment factor of 2.57.
Mishra argues that while these frameworks were useful in previous decades, they fail to reflect today’s cost of living, which includes additional expenditures such as internet access, digital services, healthcare advancements, and urban living costs.
Why the 8th Pay Commission Should Adjust the Family Unit Concept
The 15th ILC norms determined the minimum wage requirement based on a family consisting of three units:
Earning husband = 1 unit
Non-working wife = 0.8 unit
Two children = 0.6 units each
However, Mishra proposes that the 8th Pay Commission should increase the family unit size from three to five, to account for dependent parents. This change aligns with the Maintenance and Welfare of Parents and Senior Citizens Act, 2022, which legally obligates individuals to support their elderly parents.
How the Fitment Factor Impacts Employees and Pensioners
If the fitment factor remains at 2.57, the revised salary and pension would be:
Minimum salary: Rs 46,260 (up from Rs 18,000)
Minimum pension: Rs 23,130 (up from Rs 9,000)
However, if the fitment factor is increased to 2.86, these figures would be significantly higher, ensuring better financial security for government employees and retirees.
Inflation and Rising Costs: The Need for a Higher Fitment Factor
Mishra also highlighted that the Aykroyd formula does not account for modern expenses, such as:
Internet and digital expenses
Higher healthcare costs
Rising transportation costs
Increased education expenses
Given these factors, it is imperative that the 8th Pay Commission ensures a fitment factor of at least 2.57, if not higher.
Conclusion
As the 8th Pay Commission takes shape, the focus will be on ensuring fair compensation for central government employees and pensioners. Shiv Gopal Mishra’s demand for a fitment factor of at least 2.57 is backed by historical precedents and present-day economic realities. Given the rapid increase in the cost of living, the final decision of the 8th Pay Commission will be closely watched, as it will directly impact the financial well-being of millions of government employees and pensioners across India.
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