The 8th Pay Commission may offer central government employees only a 13% effective salary hike, lower than the previous 14.3%, says a Kotak Institutional Equities report.
8th Pay Commission Update: Central government employees are likely to see a modest 13% effective salary hike under the upcoming 8th Pay Commission, slightly lower than the 14.3% increase granted during the 7th Pay Commission rollout, according to a recent report by Kotak Institutional Equities.
The fitment factor, which plays a crucial role in calculating basic pay, is anticipated to be set at 1.8 for the 8th Pay Commission, as per the report. This figure marks a significant decrease from the 2.57 used in the previous commission. While a 1.8 fitment factor suggests an increase in basic pay — potentially rising from Rs 18,000 to around Rs 32,000 — the overall effective salary growth is expected to be minimal. This is due to the reset of the dearness allowance (DA), currently at 55%, to zero upon the implementation of the new pay structure.
Impact on Salary Structures
For employees with a basic salary of Rs 50,000, the revised pay could reach approximately Rs 90,000. However, factoring in the existing DA of Rs 27,500, the effective salary increase will only amount to Rs 12,500, rising from Rs 77,500 to Rs 90,000, excluding other allowances. Experts indicate that although the nominal increase in basic pay appears substantial, the actual hike will heavily depend on the new DA structure's implementation.
Employee Unions Demand Higher Fitment Factor
Employee unions have expressed their dissatisfaction with the proposed fitment factor. Representatives from the National Council-Joint Consultative Machinery (JCM), which advocates for central government employees and pensioners, have stated their demand for a fitment factor that matches or exceeds that of the 7th Pay Commission. Despite these demands, early indicators suggest that the government may opt for a lower figure.
The formal establishment of the 8th Pay Commission is expected in the coming months, with its recommendations likely to be implemented around 2026. As the discussions unfold, central government employees await further clarity on their salary adjustments amid rising living costs.
No comments:
Post a Comment