8th Pay Commission: 'Fitment Factor has to be 2.57 or Higher'

 8th Pay Commission: 'Fitment Factor has to be 2.57 or Higher' - NC JCM Secretary Explains Why

The fitment factor recommended by the 7th Pay Commission was 2.57. According to NC-JCM (staff side) secretary, the 8th Pay Commission should propose the same fitment factor, if not higher.

The Centre's nod for the formation of 8th Pay Commission has shifted attention towards fitment factor and other modalities for the revision of salaries and pensions of central government employees and retirees, respectively.

Fitment factor, which is the multiplication unit used for revising the base salaries and pensions, should be the same or higher than what the 7th Pay Commission proposed, according to Shiv Gopal Mishra, secretary (staff side) of the National Council-Joint Consultative Machinery.

"I still believe that the fitment factor should not be less than what the last pay commission had proposed. It has to be at least 2.57, or higher than that," Mishra said, in a telephonic conversation with NDTV Profit.

Mishra, notably, had sparked speculations when he told NDTV Profit in November last year that the NC-JCM—the official body to resolve disputes between the central government and its employees through dialogue—will demand a fitment factor of 2.86 after the 8th Pay Commission is formed.

*LA fitment factor of 2.86, if recommended by the 8th Pay Commission, would raise the minimum salary from Rs 18,000 to Rs 51,480. The minimum pension, in such a scenario, would rise from Rs 9,000 to Rs 36,000.

As Mishra's erstwhile demand sparked speculations, former Finance Secretary Subhash Garg told a news channel that demanding a fitment factor of 2.86 is similar to "asking for the moon". According to him, the fitment factor could be around 1.92.

Mishra, who had also led the negotiations on behalf of NC-JCM with the 7th Pay Commission, believes that the fitment factor cannot be less than 2.57 considering the current pace of inflation.

A fitment factor of 2.57, if recommended by the 8th Pay Commission, would raise the minimum salary from Rs 18,000 to Rs 46,260, whereas the minimum pension would rise from Rs 9,000 to Rs 23,130.

Rationale Behind 2.57-Fitment Factor Demand

Mishra, while speaking to NDTV Profit, explained the rationale behind his demand. He pointed out that the 7th Pay Commission had arrived at the fitment factor of 2.57 after taking into consideration the resolutions of 15th Indian Labour Conference held in 1957, and Dr Aykroyd's formula on minimum living wage.

Both these yardsticks are several decades old, and do not accurately reflect the minimum requirements of workers and their families in the present age, Mishra explained.

The 7th Pay Commission had stated that the 15th ILC norms were “the best approach to estimating the minimum pay as it is a need-based wage calculation that directly costs the requirements, normatively prescribed to ensure a healthy and a dignified standard of living”.

Dr Aykroyd's formula is linked to 20th-century American nutritionist Wallace R Aykroyd. The formula takes into consideration the increase in prices of various commodities that constitute a common person's basket.

Relying on them, the 7th Pay Commission proposed a fitment factor of 2.57, which raised the minimum salary in 2016 from Rs 7,000 to Rs 18,000.

Based on the 15th ILC norms, the minimum wage is determined while considering the consumption need of "three units". The earning husband of a family is counted as one unit, his wife counted as 0.8 unit and two children are counted as 0.6 units each.

According to Mishra, the 8th Pay Commission should determine the minimum salary while considering the consumption need of "five units" instead of three. This is because an earning worker has to undertake the responsibility of dependent parents as well, he said.

"Taking care of aged parents is an ethical, as well as legal responsibility under the Maintenance and Welfare of Parents And Senior Citizen Act 2022, and therefore, the family units should be counted as five and not three units," he explained.

Mishra also pointed out that the Aykroyd formula, though seen as a yardstick to determine minimum living wages, pertains to the 20th century and does not factor-in the expenses incurred in the modern era. "For instance, in today's age, there is a thrust on going digital. When everything is getting digitised, the Aykroyd formula does not address the expenses of internet," he said.

"So, when the 7th Pay Commission came at a fitment factor of 2.57 after relying on 15th ILC resolution and Aykroyd formula, then the 8th Pay Commission should be proposing at the least the same fitment factor, if not higher, considering today's cost of living," noted Mishra, who is also the general secretary of All India Railwaymen's Federation