Explained: Fitment Factor of 2.57 Or Higher justified by NC-JCM Secretary

Centre Approves 8th Pay Commission: Focus on Fitment Factor and Salary Revision

The Central Government has approved the formation of the 8th Pay Commission, shifting attention to the fitment factor and other details for revising salaries and pensions of government employees and retirees.

What is the Fitment Factor?

The fitment factor is a multiplier used to revise base salaries and pensions. According to Shiv Gopal Mishra, Secretary (Staff Side) of the National Council-Joint Consultative Machinery (NC-JCM), the fitment factor in the 8th Pay Commission should be at least the same or higher than what was recommended by the 7th Pay Commission.

"I strongly believe that the fitment factor should be more than what was recommended last time. It should be at least 2.57 or higher," Mishra told NDTV Profit.

Proposal for a Higher Fitment Factor

Earlier, in November last year, Mishra had stated that the NC-JCM would demand a fitment factor of 2.86 after the 8th Pay Commission is set up.

If the 8th Pay Commission recommends 2.86, the minimum salary will increase from Rs 18,000 to Rs 51,480, and the minimum pension will rise from Rs 9,000 to Rs 36,000.

However, former Finance Secretary Subhash Garg has said that demanding a fitment factor of 2.86 is unrealistic and "like asking for the moon." He estimated that the fitment factor could be around 1.92.

Why a Minimum Fitment Factor of 2.57?

Mishra, who was also part of the 7th Pay Commission negotiations, believes that a fitment factor of less than 2.57 is unacceptable due to rising inflation.

If the 8th Pay Commission recommends 2.57, the minimum salary will rise from Rs 18,000 to Rs 46,260, and the minimum pension will increase from Rs 9,000 to Rs 23,130.

Reason Behind the 2.57 Fitment Factor Demand

Mishra explained that the 7th Pay Commission calculated the 2.57 fitment factor based on:

1. 15th Indian Labour Conference (ILC) 1957 resolutions
2. Dr. Aykroyd’s formula on minimum living wage

However, both these methods are outdated and do not fully reflect modern-day expenses, Mishra said.

The 7th Pay Commission used the 15th ILC norms because they provide a need-based wage calculation, ensuring a basic, healthy, and dignified living standard.

Dr. Aykroyd's formula, created by 20th-century American nutritionist Wallace R. Aykroyd, calculates wages based on the rising prices of essential commodities.

Minimum Salary Calculation: 3 Units vs. 5 Units

Under the 15th ILC norms, the minimum wage is determined considering the needs of "three units":

• The earning husband (1 unit)
• The wife (0.8 unit)
• Two children (0.6 units each)

Mishra argues that the 8th Pay Commission should consider "five units" instead of three because an earning worker also supports dependent parents.

"Taking care of aged parents is both an ethical and legal responsibility under the Maintenance and Welfare of Parents and Senior Citizen Act 2022. So, family units should be counted as five instead of three," he said.

Need to Update Wage Calculation Methods

Mishra also pointed out that Dr. Aykroyd’s formula is outdated.

"In today’s world, everything is going digital, but the Aykroyd formula does not include modern expenses like internet costs," he said.

He further stated, "Since the 7th Pay Commission recommended a 2.57 fitment factor based on outdated formulas, the 8th Pay Commission should propose at least the same, if not higher, considering the rising cost of living."

Mishra, the General Secretary of the All India Railwaymen’s Federation, emphasized that employees deserve a fair revision that meets modern financial needs.