8th Pay Commission: Pay Commissions have been the benchmark for the salary increases for the government employees. Moreover, fitment factor is the matrix by which the government calculates the salary and pensions of its employees and pensioners. Meanwhile, the central government may consider using the Aykroyd formula, developed by Dr. Wallace Aykroyd, to determine the wages. Furthermore, this formula calculates the ideal salary based on the minimum cost of living.
8th Pay Commission: How Fitment Factor Is Calculated?
In an exclusive interview with News24, former Finance Secretary Subhash Chandra Garg explains the method by which the fitment factor is calculated. Garg said, “Currently, the DA is 53% (as of July 1, 2024).” “To calculate the DA till January 1, 2026, two more installments need to be added: one due on January 1, 2025, and another on July 1, 2025. Assuming a 7% increase, the DA for January 1, 2026, would be approximately 60%,” he added.
With the DA at 60% the starting fitment will be 1.60. “With the starting factor of 1.6, the next step is to determine the percentage increase,” added Garg. He further said, “Usually, pay commissions have recommended increases ranging from 15% to 30%. In my assessment, the additional fitment factor to be applied to the base factor of 1.6 is likely to range between 10-30%.”
Explaining the calculation, Garg said, “Taking 20% of the base factor 1.6 or 160 (on the assumption of 60% DA), we get 32. Adding 32 to 160 results in a revised fitment factor of 192 or 1.92. If we assume a more generous 30% increase, the calculation would be: 30% of 160 is 48. Adding this to the base factor, we get 208, or a revised fitment factor of 2.08.”
“So, the actual fitment factor is likely to be between 1.92-2.08,” he concluded.
