The “fitment factor” is a coefficient that scales up the basic salary (and pension) of the central government workers when a new pay commission makes its proposals implemented. The last 7th Pay Commission had set this factor at 2.57 times. Once the 8th Pay Commission takes over, a new fitment factor will be calculated for the ‘old’ basic pay and new basic salary — thus, a verdict on the extent of your pay (or pension) hike will be made.
Projected Range & Its Implications
As per the update of the year 2025:
- A good number of experts have a common view that the fitment factor for 8th CPC will be around 2.13 and 3.0 (and possibly more depending on the final decisions).
- There are some forecasts that speak of a larger multiplier that could result in a 30-50% (or even more) basic pay increment compared to the current figures.
Thus, an employee with a basic pay of ₹25,000 at present would receive a pay of about ₹62,500 (before allowances, DA, etc.) after the imposition of a fitment factor of 2.5. As a rule, the new basic pay will be the basis for calculating all allowances (House Rent Allowance, Dearness Allowance, Transport Allowance, etc.) as well as pension amounts (for pensioners), so the increase will affect a wider range than just basic salary.
Who Benefit — Both Employees & Pensioners
- Central government employees in service: Monthly gross income (basic + allowances + DA) of the employees is expected to increase considerably due to the higher basic salary and recalibrated allowances once the 8th CPC is put into operation.
- Retired Employees/Pensioners: Basic pay at retirement is the basis for pension computation — so adding the fitment factor to the older basic pay would lead to an increase in pension and dearness relief (if DA/DR continues).
What to Keep in Mind — Not All Are Fixed Yet
- The last fitment factor is still waiting for an official confirmation — analyst have given a range but nothing is final yet.
- More allowances and higher salaries could also lead to a higher tax liability mainly for retired persons.
- The regulations regarding Dearness Allowance (DA) may see a redefinition when the new salary structure is implemented — due to the merging or revision of allowances — which might reduce the increase in the basic pay.
Also Read: Get ₹50,000 Bajaj Finance Loan: Easy EMI of Just ₹4,500…
