8th Pay Commission: Can a bigger annual increment lead to better pay than a higher fitment factor over 10 years?

The 8th Pay Commission completed a year since its constitution this month. This is a temporary three-member panel, headed by Justice Ranjana Prakash Desai, responsible for hearing the views of eligible unions and associations and drafting its final recommendations for the central government.

The 8th Pay Commission’s salary revision will depend on two critical factors: the fitment factor and the annual increment rate. A higher fitment factor yields a larger increase in basic pay; a higher annual increment can deliver stronger long-term salary growth.

In the 6th and 7th Pay Commissions, central government employees received fitment factors of 1.86 and 2.57, respectively. In the 7th Pay Commission, the annual increment of 3% was finalized. For the 8th Pay Commission, prominent employee unions have demanded fitment factors of up to 4.38 and annual increments of up to 7%.

Prominent employee unions such as the National Council of the Joint Consultative Machinery (NC-JCM), All India Defence Employees Federation (AIDEF), Federation of National Postal Organisations (FNPO) and All India NPS Employees Federation (AINPSEF) are pushing for a fitment factor of 3.833 that, if implemented, will result in raising the basic pay from the present ₹18,000 to ₹69,000.

The NC-JCM, FNPO and AIDEF have sought 6% annual increments, and AINPSEF has put forward 7%, whereas the Indian Railways Technical Supervisors’ Association (IRTSA) has recommended 5% increments.

8th Pay Commission: How could salaries grow over 10 years?

Let us consider three different scenarios.

• A fitment factor of 2.57 with an annual increment of 3%
• A fitment factor of 2.1 with an annual increment of 7%
• A fitment factor of 2.57 with an annual increment of 7%

The above scenarios are based on the official increment and fitment factors decided by the 7th Pay Commission, i.e., a fitment factor of 2.57 and an annual increment of 3%.

Below are the estimates showing projected basic pay for employees currently serving in Pay Levels 5, 6 and 7 under the 7th Pay Commission. Also, the starting basic pay for each level is being taken into account in the projections.

The comparison shows that a higher fitment factor can lead to a higher starting salary for employees. However, the gap narrows gradually over five years, and by the 10-year mark (a decade hence), the 7% increment scenario produces substantially higher basic pay.

Due to this, AINPSEF said that a 7% annual increment, if implemented, can double an employer’s gross salary in seven to eight years, thereby reducing dependence on a pay commission’s 10-year revision cycle.

The official fitment factor, increment rate and revised pay structure will be known only after the 8th Pay Commission submits its final report, tentatively in May-June 2027 and the Centre's decision.