8th Pay Commission: 1.92, 2.0 Or 2.57? Fitment Factor Talks To Start After ToR Nod

The forum representing central government employees and pensioners will accelerate its discussions around the fitment factor and minimum wages after the Terms of Reference for the 8th Pay Commission gets the government's nod, persons privy to the matter said.

Fitment factor, notably, is the multiplication unit used for revising the salaries of central government employees. Under the 7th Pay Commission, the fitment factor recommended was 2.57, which ended up raising the minimum salary from Rs 7,000 to Rs 18,000.

"We are waiting for the Terms of Reference for 8th Pay Commission to be approved. Then we will move ahead with our demand for these (fitment factor and minimum wage)," a member of the National Council-Joint Consultative Machinery, or NC-JCM, told NDTV Profit on the condition of anonymity.

NC-JCM, notably, is an official body comprising bureaucrats and employee union leaders, and its purpose is to resolve all disputes between the government and staff through dialogue.

Once the ToR is approved, the staff side's focus will shift towards their demands to be made before the 8th Pay Commission, and the foremost will be their ask related to the fitment factor and minimum wages, another NC-JCM member said.

Both the persons declined to share a specific range of fitment factor, which they are tentatively expecting the 8th Pay Commission to recommend.

Speculations have been rife since months over the fitment factor that the employee unions may demand during the consultation with the panel.

Some union leaders had talked about seeking a fitment factor as high as 2.57-2.86, but former Finance Secretary Subhash Garg had said in January that such a demand is unlikely to be accepted. According to him, the fitment factor could be around 1.92.

Some of the stakeholders, earlier this year, had also talked about seeking a minimum salary of "at least Rs 36,000", which indicated that a demand for 2.0 as the fitment factor could be on the cards.

ToR In Focus

The staff side of NC-JCM forwarded its draft Terms of Reference, or ToR, for the 8th Pay Commission in January. The forum said that the commission should consider the consumption need of "five units", instead of three at present, to determine the minimum salary of an employee.

Under the 7th Pay Commission—which followed the norms laid down by the 15th Indian Labour Conference—the minimum wage is determined based on the consumption need of "three units". The earning husband of a family was counted as one unit, his wife counted as 0.8 unit and two children were counted as 0.6 units each.

The staff side of NC-JCM, however, argued that taking care of aging parents is an ethical and legal responsibility under the Maintenance and Welfare of Parents And Senior Citizen Act 2022, and therefore, the family units should be counted as five and not three units.

Also, the forum has sought the merger of unviable pay scales to address the issue of pay stagnation, which indirectly affect the Modified Assured Career Progression Scheme. It has asked for the merger of pay scale level 1 with level 2, level 3 with level 4, and level 5 with level 6.

The forum has also reiterated its demand for the merger of 50% of dearness allowance with the basic salary. Currently, the DA stands at 55% of the basic salary, following the 2% hike announced in March.

Under the 5th Pay Commission—which lasted from 1996 to 2006—the rule was to merge the basic pay with DA, once the allowance crosses 50% of basic salary. Accordingly, the government had integrated DA with basic salary in 2004. However, this norm was discontinued under the 6th and 7th Pay Commission.

The staff side of NC-JCM, while submitting its recommendation for ToR, had also called restoration of the commuted portion of the pension after 12 years, and "to implement the recommendations of the Parliamentary Standing Committee on enhancement of pension after every five years."

Notably, the 8th Pay Commission is expected to be formally set up after the finalisation of ToR. Its formation is awaited by 50 lakh central government employees and around 65 lakh pensioners.

Since independence, seven pay panels have been formed. The last pay commission came into effect in 2016, and it had an estimated impact of Rs 1.02 lakh crore on the exchequer in fiscal 2017.