8th Pay Commission: Discussions are gaining momentum regarding the salary increase under the 8th Finance Commission. Last month, a meeting of the National Council, Joint Consultative Machinery, was held. In this meeting, a demand was made to increase the family unit for salary revision under the 8th Finance Commission from three to five.
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8th Pay Commission: Discussions are gaining momentum regarding the salary increase under the 8th Finance Commission. Last month, a meeting of the National Council, Joint Consultative Machinery, was held. In this meeting, a demand was made to increase the family unit for salary revision under the 8th Finance Commission from three to five. If this demand is accepted, it will have a direct impact on the fitment factor. This could increase employees’ salaries by up to 66%. Let’s understand how.
What is the family unit formula in the Pay Commission?
According to a report in the Economic Times, C. Srikumar, Secretary General of the All India Defence Employees Federation, says that the three-family unit formula was introduced at the 15th Indian Level Conference in 1956. Since then, this formula has been used to calculate basic pay in the Pay Commission.
Why is there a demand to increase the family unit?
People familiar with the matter argue that parents now have legal responsibility for their children. Furthermore, nuclear families are being promoted on a large scale. Consequently, there is talk of including parents in the family unit.
Basic pay will increase by 66%
According to a report in the Economic Times, if the number of family units is increased from three to five, the basic pay will increase by 66 percent. An increase of one family unit is expected to increase the basic pay by 33.33 percent. An increase of two could increase the basic pay by 66 percent.
Let’s understand the impact.
What will be the impact if the full family unit rule is implemented? If an employee earns a basic pay of ₹78,000, the current DA rate is 58%. The DA could increase by 8%. The annual increment is 12%. If the fitment factor remains at 1.76%, the basic pay will be at least ₹138,688.
2- Second scenario: If the family unit is increased from 3 to 5, the fitment factor will become 2.42. Consequently, the basic pay of an employee earning ₹78,800 will increase to ₹190,676.
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