This will increase the salary in a balanced and uniform manner. The fitment factor can be 3.0

The central government had announced the formation of the 8th Pay Commission in January 2025, which will come into effect after the completion of the 7th Pay Commission in December 2025. Since this announcement, the discussion has intensified on how the new pay commission will decide the salary of the employees. Especially, everyone’s eyes are fixed on the merger of the fitment factor and dearness allowance (DA).

What is the fitment factor?

The fitment factor is the multiplier with the help of which the basic salary of the employees is converted into the new pay scale. Its purpose is to ensure that there is a uniform increase at all levels, and the effect of inflation and allowances is also included in it.

How was DA merged in the previous pay commissions

Central government employees were receiving 125% DA on their basic pay before the 7th Pay Commission was implemented in January 2016. The commission determined a fitment factor of 2.57 on this basis, which included basic pay, 125% DA and actual increase of about 14.22%.

Let us understand this with an example under the 7th Pay Commission. Suppose the basic salary of an employee was ₹10,000.

• 125% AND = ₹12,500
• Total = ₹22,500
• 14.22% Actual increase = ₹3,199.5
• New Salary = ₹25,700
• Fitment factor = 25,700 / 10,000 = 2.57

What can be the changes in 8th pay commission

Currently, employees are getting more than 50% DA and it is expected to reach close to 70% by 2025. In such a situation, it is quite likely that the new pay commission will also merge DA into the basic salary like before and apply a fitment factor on it. If sources are to be believed, the new fitment factor can be 3.0 or more.

Will employees who retire before January 1, 2026 be left out?

Often the question arises that will the employees who retire before the implementation of the new commission be deprived of its benefits? Usually the government gives retrospective effect in such cases, that is, the new pay scale is applicable from the previous date. In such a situation, there is a possibility that they will also get its benefit, although the final decision will depend on the government notification.

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The post 8th Pay Commission: New formula for salary revision prepared in 8th pay commission, Check Details first appeared on Rightsofemployees.com.

The 7th Pay Commission is currently in force in the country and the 8th Pay Commission is to be implemented after one and a half years. The central government implements a new pay commission every 10 years. Since the 7th Pay Commission was implemented in January 2016, the recommendations of the 8th Pay Commission can be implemented from January 2026. The Modi government at the Center can start preparations for the next Pay Commission soon and there is a buzz that some announcement regarding this can also be made in the upcoming budget.

More than one crore employees and pensioners will benefit

Shiv Gopal Mishra, Secretary of the National Council of Joint Consultative Machinery for Central Government Employees, has written a letter to the Central Government. In this, a demand has been made for the formation of the 8th Pay Commission. The formation of the 8th Pay Commission will benefit about 49 lakh government employees and 68 lakh pensioners, that is, more than 1 crore people will be able to benefit from it.

Also Read: Good news for 1 crore central employees and pensioners! Proposal received to give 18 months’ DA arrears

Budget 2024-25 will come on 23 July

Finance Minister Nirmala Sitharaman will present the General Budget 2024-25 on July 23. The Central Government Employees Union is demanding the formation of the 8th Pay Commission in the upcoming budget. Not only this, the employees and workers have also prepared and submitted a proposal for this.

How much will the salary of employees increase

It is expected that their salary will also be increased with the increase in the fitment factor under the 8th Pay Commission. The fitment factor is the main formula that helps in calculating the salary and pay matrix of employees under the 8th Pay Commission.

What can be the fitment factor in the 8th pay commission

According to a recent report by Financial Express, the fitment factor can be set at 3.68 times. If this happens, the basic salary will increase by Rs 8000 due to the increase in the fitment factor in the 8th Pay Commission. After this, the minimum basic salary of government employees will increase from Rs 18,000 to Rs 26,000. An increase of between 25-35 percent can be seen in the total income including basic salary and dearness allowance.

What was the fitment sector in the 7th pay commission

In the 7th Pay Commission, a fitment factor of 2.57 times was introduced which increased the minimum salary by about 14.29 percent. After this, the minimum salary became Rs 18 thousand.

These things will change with the new pay commission

The 8th Pay Commission will see an increase in the basic pay, allowances, pension and other monetary benefits. First of all, the salary of the employees will increase. Since the Pay Commission itself prepares the formula for deciding Dearness Allowance (DA) for employees and Dearness Relief (DR) for pensioners and other allowances.

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Meanwhile, the demand for the formation of the 8th Pay Commission has also started rising. In this regard, the National Council has written a letter to Cabinet Secretary Rajiv Gauba and appealed to the government to give priority to the formation of the 8th Pay Commission.

Why is there a need for 8th Pay Commission

Gopal Mishra of the National Council said that post-Covid-19 inflation is higher than pre-Covid. If we compare the retail prices of essential commodities and items needed for daily life from 2016 to 2023, they have increased by more than 80 per cent. We were given only about 46 per cent dearness allowance (DA) till July 1, 2023. So there is a difference between the actual price rise and the DA given to employees, pensioners. He further said that the revenue of the central government has doubled from 2015 to 2023, which indicates a big increase in revenue collection. Therefore, the central government has more paying capacity than in the year 2016.

Also Read: Central employees will get 55% dearness allowance ? salary will increase by this much

Formation takes place every 10 years

Let us tell you that a pay commission is constituted by the government every 10 years. This commission reviews the salary structure, allowances and benefits of central government employees. It proposes necessary changes in salary, allowances or benefits keeping in mind external factors like inflation. On 28 February 2014, former Prime Minister Manmohan Singh constituted the 7th Pay Commission. This pay commission submitted its report to the government on 19 November 2015. After this, the recommendations of the pay commission were implemented from 1 January 2016.

When is the 8th pay commission implemented?

If the government approves the formation of the 8th Pay Commission, it can be effective from January 1, 2026. This pay commission may take about one and a half years to prepare the report. However, the government has not yet announced its formation. Let us tell you that as per the recommendations of the Seventh Pay Commission, the DA of central employees is 50 percent. It is going to increase once again in the July to December half year.

The post 8th Pay Commission: Govt gets proposal for hike in DA, basic pay, pension. Details Here first appeared on Rightsofemployees.com.

Now it has been increased from 34 per cent to 38 per cent. The Office of Memorandum has been issued in this regard by the Department of Expenditure on October 3. When will get the benefit of this decision of the government, who will get it and how, let us understand all these things in 5 points.

1>> Central employees will now get dearness allowance of 38 percent not 34. This allowance will be on the basis of basic pay. The revised rate will be applicable from 1st July 2022.

2>> The Seventh Pay Commission has fixed the ‘Basic Pay’ on the basis of different levels. This proposal has been fixed according to the revised pay structure. It has also got approval from the central government. When we talk about basic pay, there is no special allowance included in it.

3>> Let us tell you that basic pay is an integral part of the salary of any central employee. This is treated as salary within the purview of FR9(21).

4>> In the notification issued by the Department of Expenditure, it has been clearly said that if there is 50 paise and more in the payment of dearness allowance, it will become a full rupee. If it is less than that, it can be ignored.

5>> According to the notification, the benefit of Revised Dearness Allowance will also be available to the civilian employees of Defense Services. This expenditure will come under the head of that particular Defense Service Estimate. In this regard, separate notifications for Armed Forces Personnel and Railway Employees will be issued by the Ministry of Railways and Ministry of Defense.

6591 crore annual burden on the treasury

Let us tell you that according to the press note issued by the Press Information Bureau on September 28, the increase in Dearness Allowance will put an annual burden of 6591 crores on the government exchequer. For the financial year 2022-23, this burden will be only Rs 4394 crore, as there are only eight months from July to February 2023.

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The Employees’ Provident Fund Organization (EPFO) has fixed the maximum salary of Rs 15,000 (basic pay) for the pension of the employees. Meaning, even if your salary is more than Rs 15,000 per month, but your pension will be calculated only on the maximum salary of Rs 15,000.

One decision and pension can increase manifold-

Hearing is going on in the Supreme Court to end this salary-limit of EPFO. Employee Pension (Employee Pension Scheme) can also be calculated on the last pay i.e. higher pay bracket. With this decision, the employees will get many times more pension.

Let us tell you, to get the pension, it is necessary to contribute to the Employees’ Provident Fund (EPF) for 10 years. At the same time, on completion of 20 years of service, a weightage of 2 years is given. If the Supreme Court decides to remove the limit, then how much difference will it make, let’s understand…

How to increase your pension

According to the current system, if an employee is working from 1st June 2015 and wants to take pension after completing 14 years of service, then his pension will be calculated as Rs.15 thousand only. regardless of how many years he has been working. 20 thousand Rs. Be in the basic salary bracket or Rs 30,000.

According to the old formula, on completion of 14 years, the employee will get a pension of about Rs 3000 from June 2, 2030. The formula for calculation of pension is- (Service Historyx15,000/70). But, if the Supreme Court decides in favor of the employees, then the pension of the same employee will increase.

Example number 1

Suppose the salary (Basic Salary + DA) of an employee is 20 thousand rupees. His pension will be Rs.4000 (20,000X14)/70 = Rs.4000 by calculating the pension formula. Similarly, higher the salary, higher will be the benefit of pension. There can be a jump of 300% in the pension of such people.

Example No.-2

Suppose the job of an employee is 33 years. His last basic salary is 50 thousand rupees. Under the current system, pension was calculated on a maximum salary of Rs 15,000. Thus (formula: 33 years + 2 = 35/70×15,000) the pension would have been only Rs 7,500.

This is the maximum pension in the current system. But, after removing the pension limit, adding the pension according to the last salary, they will get a pension of 25000 thousand rupees. Means (33 years + 2 = 35/70×50,000 = Rs 25000).

Pension can increase up to 333%

! and are joined. Thus 33 years of service was completed, but pension was calculated for 35 years. In such a situation, the salary of that employee can increase by 333 percent.

What is the whole matter

Employees Pension Revision Scheme, 2014 was implemented by the Central Government by issuing a notification from 1st September 2014. This was opposed by the private sector employees and in the year 2018 it was heard in the Kerala High Court. All these employees were covered by the facilities of the EPF and Miscellaneous Provisions Act, 1952. Employees protested against EPFO’s rules, saying it ensures them less pension.

Because even if the salary is more than 15 thousand, but the calculation of pension has been fixed at the maximum salary of 15 thousand rupees. However, before the amendment made by the central government on September 1, 2014, the amount was Rs 6,500. Considering the EPFO’s rules to be unfair, the Kerala High Court had ruled while accepting the writ of the employees. On this, the EPFO ​​filed an SLP in the Supreme Court, which was rejected by the Supreme Court.

Decision came in 2019 –

The Supreme Court decided to hear its decision again. A Division Bench of Justice Surendra Mohan and Justice AM Babu, while hearing the SLP of EPFO ​​on 1st April 2019, observed – Employees, who are contributing on the basis of their actual salary after furnishing joint option with their employers, as deemed fit It’s necessary. Huh,

They are deprived of pension scheme benefits without justification. There is no justification for fixing the pension salary at Rs 15,000. The bench said that 15 thousand monthly i.e. 500 rupees per day. It is common knowledge that even a daily wage earner gets more than this. So limiting the maximum salary for pension to Rs 15000 thousand will deprive most of the employees of good pension in old age. As far as the impact on pension funds is concerned,

Re-Hearing

In January 2021, the Supreme Court reconsidered its 2019 decision and decided to hear the matter. A petition was filed against the order of the Kerala High Court on behalf of the Ministry of Labor and EPFO. The EPFO ​​is of the view that with this order the pension may increase up to 50 times (EPS upper limit). On August 25, a bench of Justice UU Lalit and Justice Ajay Rastogi, while hearing the matter, decided to refer the matter to a larger three-member bench. The case is still pending.

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