8th Pay Commission: Rs 32,400 To Rs 44,280 — How Salaries Of Peon, Attendants, Other Level 1 Staff Can Rise
Post the implementation of 8th Pay Commission, the minimum basic salary of Level 1 employees may rise in the range of Rs 32,400 to Rs 44,280. This is based on an estimated fitment factor of 1.8–2.46.
The 8th Pay Commission is set to be formally constituted, with its Terms of Reference being approved by the Union Cabinet on Tuesday. The question now shifts to how the salaries and pensions would be revised.
The panel, to be headed by Justice (retired) Ranjana Desai, will meet an array of stakeholders over the next several months, before submitting its report that entails the fitment factor and other modalities for pay revision.
In recent months, two brokerages have indicated in their research reports that the fitment factor could be in the range of 1.8 to 2.46. Notably, fitment factor is the multiplication unit used for the revision of salaries and wages.
Kotak Institutional Equities, in its report released in July, projected only a single fitment factor of 1.8. If one goes by that arithmetic, then the basic minimum salary of Level 1 central government employees, which includes peons and attendants, will rise from Rs 18,000 at present to Rs 32,400.
While this suggests an 80% increase in pay, the effective salary hike would be lower, as the Dearness Allowance would be reset to zero. This is usually done whenever a new pay commission is implemented.
At present, the DA stands at 58%. Along with the House Rent Allowance, it takes the overall entry-level salary for Level 1 employees to around Rs 29,000. The effective salary hike would, thus, be around 13%, Kotak said in the report.
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Ambit Capital, in its note also released in July, shared a fitment factor range of 1.8 to 2.46. Under their base case scenario, which is based on 1.82 as the fitment factor, the effective salary could rise by 14%. Their median case forecast suggests a fitment factor of 2.15, which can raise the salary by 34%.
However, in the upper case scenario, the fitment factor could be recommended as 2.46, which would end up raising the effective wage by a massive 54%, as per Ambit Capital.
Based on the fitment factors that have been projected by the brokerage, here's a look at the likely salary hike for Level 1 employees:
- Fitment factor of 1.82: Basic salary of Rs 18,000 can rise to Rs 32,760
- Fitment factor of 2.15: Basic salary of Rs 18,000 can rise to Rs 38,700
- Fitment factor of 2.46: Basic salary of Rs 18,000 can rise to Rs 44,280.
However, this effective salary hike would be lower as the current basic minimum pay of Rs 18,000 is supplemented by 58% DA, along with HRA and Transport Allowance.
