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The stir among central employees and pensioners regarding the formation of the 8th Central Pay Commission and its recommendations has intensified. Between the completion of the tenure of the 7th Pay Commission and the possible implementation of the new commission, the most curiosity is among those employees of Group ‘C’, who come under Grade Pay 2400 of 6th CPC i.e. Pay Matrix Level-4 of 7th CPC. This cadre includes a large number of important posts like LDC, UDC, Stenographer Grade-D, Railway Clerk, Postal Assistant (PA/SA) and Head Constable of Central Police Forces.
At present, according to the pay matrix of the 7th Pay Commission, the starting basic pay of Level-4 is fixed at Rs 25,500 per month. After the Fitment Factor is fixed by the government in the 8th Pay Commission, it is considered certain that there will be a huge increase in the basic salary. According to estimates by financial experts and employee unions, if the fitment factor remains in the range of 2.28 to 2.86, then the monthly in-hand salary of grade-pay 2400 employees will see a historic jump.
In the recommendations of the Pay Commission, ‘Fitment Factor’ is the main basis for determining the new salary of the employees. In the 7th Pay Commission it was kept at 2.57x. Regarding the 8th Pay Commission, experts and various employee organizations are expressing the demand and possibility of different fitment factors.
If key fitment factors are applied to the current starting basic of Rs 25,500, the new basic salary could be as follows:
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Possible minimum fitment factor (1.92x): 25,500 × 1.92 = Rs 48,960
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Medium/Most Estimated Fitment Factor (2.28x): 25,500 × 2.28 = Rs 58,140
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Fitment factor equal to 7th Pay Commission (2.57x): 25,500 × 2.57 = Rs 65,535
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Fitment factor demanded by employee unions (2.86x): 25,500 × 2.86 = Rs 72,930
In current discussions, a fitment factor of 2.28 to 2.46 is being considered the most realistic. If the average coefficient of 2.28 is also accepted, then the minimum basic salary of an employee with grade-pay 2400 will directly increase from Rs 25,500 to about Rs 58,140.
As soon as the new pay commission is implemented, Dearness Allowance (DA) is usually reset to zero (0%) and the existing DA is absorbed into the basic salary. Thereafter the other allowances are reorganized on the basis of percentage of the new basic pay:
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House Rent Allowance (HRA): As per 7th Pay Commission rules, after DA crosses 50%, HRA rates have become 30% for ‘X’ category metros, 20% for ‘Y’ category Tier-2 cities and 10% for ‘Z’ category rural and small towns. If the basic in the 8th Pay Commission is Rs 58,140, then the monthly HRA in
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Transport Allowance (TPTA): Level 4 employees currently get Rs 3,600 + DA in designated cities and Rs 1,800 + DA in other cities. Under the 8th Pay Commission, the base rates of TPTA are likely to be revised to double the level.
If a newly recruited Level-4 employee (GP 2400) is calculated for an ‘X’ category city like Delhi/Mumbai on the basis of 2.28 fitment factor, the probable salary slip pattern will look like this:
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Revised Basic Pay: Rs 58,140
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Dearness Allowance (DA at 0% initial): 0 rupees
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House Rent Allowance (HRA at 30%): Rs 17,442
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Transport Allowance (TPTA Estimated): Rs 4,500 to Rs 5,000
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Estimated Gross Salary: Around Rs 80,000 to 81,000 per month
Whereas the estimated gross salary of employees working in Tier-2 (‘Y’ category) cities is estimated to be around Rs 72,000 to 74,000 and in ‘Z’ category cities it is estimated to be between Rs 65,000 to 67,000. Even after 10% mandatory NPS or Unified Pension Scheme (UPS) contribution and other deductions, in-hand salary may see a net monthly increase of Rs 15,000 to Rs 20,000 compared to the current salary.
This calculation is only for the initial stage (Cell 1). Employees who have been working in Grade Pay 2400 for the last several years and whose current basic pay has reached Rs 35,000 to Rs 45,000 due to annual increment, their revised basic pay will cross Rs 80,000 to Rs 1,00,000. This will also lead to an unprecedented increase in their retirement benefits (gratuity, leave encashment) and the basis of pension calculation. Central employees have been eagerly waiting for the official notification of the Commission and declaration of fitment factor for a long time.