8th Pay Commission: 7% Annual Increment and 3.25 Fitment Factor Proposed by Drafting Committee

8th Pay Commission: The discussions surrounding the 8th Pay Commission (CPC) for Central Government employees and pensioners have reached a fever pitch. A crucial process has begun in New Delhi to determine the future salary structure. The Drafting Committee of the National Council (Staff Side) – Joint Consultative Machinery (NC-JCM) is currently holding a week-long session in the capital. Their primary objective is to finalize a unified memorandum of demands representing over 1 crore employees and pensioners.

With office space recently allotted at the ‘Chandralok Building’ on Janpath for the commission chaired by Justice Ranjana Prakash Desai, employee federations are moving swiftly to consolidate their recommendations.

Proposed Changes in Salary Structure: The Akroyd Formula

This time, the focus is shifting away from a uniform multiplier. The Federation of National Postal Organisations (FNPO) has introduced a sophisticated “Multi-Level Fitment Factor” proposal rooted in the ‘Akroyd Formula’. This formula calculates the minimum living wage based on the nutritional and essential needs of a four-member family unit.

The Proposed Tiered Fitment Structure:

• Levels 1 to 5: A Fitment Factor of 3.00 is proposed for the lowest-earning cadres to ensure a strong wage correction.
• Levels 6 to 12: A factor ranging from 3.05 to 3.10 to recognize increased supervisory and technical responsibilities.
• Levels 16 and Above: Up to 3.25 for top-tier officials to prevent pay compression at the highest levels.

If this proposal is accepted, the minimum entry-level pay (Level 1), which is currently Rs 18,000, could jump to Rs 54,000.

Beyond Basic Pay: Demands for Allowances and Increments

While the fitment factor remains the centerpiece, major federations like the All India Defence Employees’ Federation (AIDEF) have placed several high-stakes demands on the table:

1. Annual Increment Hike: There is a significant push to increase the annual increment rate from the current 3% to 7% (or at least 5% as suggested by some bodies) to ensure meaningful financial progression throughout a career.
2. Expansion of Family Unit: A demand to increase the family unit count from 3 to 5 members (including dependent parents) in salary calculations. Mathematically, this single change could trigger a 66% increase in basic salary calculations.
3. Medical & Travel Allowances: Proposals include hiking the Fixed Medical Allowance (FMA) from Rs 1,000 to Rs 20,000 per month for those in non-CGHS areas and providing Leave Travel Concession (LTC) in cash.
4. Pension & Retirement: Demands include increasing leave encashment limits from 300 to 400 days and a forceful request for the total restoration of the Old Pension Scheme (OPS) by scrapping NPS and UPS.

Implementation Timeline

The drafting committee members are scheduled to remain in Delhi until early March to iron out differences between various departmental proposals. Once finalized, the joint memorandum will be submitted to Justice Ranjana Prakash Desai. While the 8th CPC is widely expected to be implemented retrospectively from January 1, 2026, the actual disbursement of revised salaries and arrears will depend on the speed at which the commission submits its final report to the Union Cabinet.