Government employees are pressing once again for a revision in the fitment factor. At present, it is pegged at a stable 2.57 and this factor establishes the basic pay of employees but the unions want it to be raised to 3.68 or higher. If their demand goes through, huge amounts would be added to the minimum pay of government employees which in turn would greatly alter their pay structure. Let’s get the latest on this subject and what the prospects for this demand are.
What Is Fitment Factor And Why Is It So Important?
The fitment factor is a multiplier that determines the basic pay of employees, especially during the transition from the 6th Pay Commission to the 7th Pay Commission. Currently, it has stabilized at 2.57, meaning that on the basis of the 6th Pay Commission the basic pay is multiplied by 2.57 to arrive at the basic pay of the 7th Pay Commission. Hence an increase in this fitment factor will increase basic pay directly which will generate similar increases in other allowances such as DA, HRA, and pension.
Why Are The Employees Unions Demanding 3.68?
Employees unions feel that the existing fitment factor of 2.57 does not represent the actual cost of living. According to them, a fitment factor of 3.68 would do justice to the toll from inflation and dipping living standards. Besides gaining a huge increase in basic pay, this would also mean a very good benefit for pensioners after retirement. They also stated that this increase should have long been done and should be made now.
What Is The Government’s Stand?
No official pronouncement has, however, been issued by the Finance Ministry. However, it is learnt that the subject is being seriously considered by the Government. One of the options is of giving a phased increase in the fitment factor, thus putting lesser burden on the exchequer. Some experts think that any such possible decision would come in a great relief in front of the 8th Pay Commission formation.
What Will Be The Impact On Salary?
In the event that the fitment factor does become 3.68, it will have a big positive effect on salaries concerning employees. For instance, an employee with basic pay of 18,000 rupees would find that their basic pay would then increase to something around 25,800 rupees, which directly translates into an enhancement of the monthly salary as well as benefits such as Dearness Allowance (DA) and House Rent Allowance (HRA). The basic pay would also work in the pension calculation after retirement.
What Are The Prospects?
An announcement concerning this issue is likely within a period of months. The employee unions are putting all pressure on the government and are also gearing for a big movement if there is no positive signal anytime soon. Some analysts opine that the government might like to gain brownie points with the employees by acceding to this demand in an election year. However, any decision will be made after taking due caution with respect to fiscal discipline.
Final thoughts
The urge for increasing the fitment factor has thrown a window of opportunity wide open before government employees for a major change in their life. Acceptance of this demand will greatly relieve employees and pensioners alike, but this will also need to be weighed against the economic consequences. Presently, all eyes turn to the next move of the government, which might soon take a clear stand on this matter.
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