Various News suggests that 7th pay commission will give 30 to 40 percent wage hike. Its right, 7th Pay Commission may offer 30 to 40 percent of Pay hike. Then what is the Fitment Formula and How much cg staff can get?
It is really quite interesting debate that how much increase will central government employees get from 7th pay commission recommendation. Some News Media recently said 30 to 40 percentage of hike in salary will be there in 7th pay commission recommendation. NCJCM Staff Side opined in its Memorandum Submitted to 7th pay commission that 3.7 can be used as Fitment formula to arrive revised Pay. NCJCM Staff Side has arrived this Fitment Formula by using Dr .Akhroyd Formula to prescribe Minimum Wage taken into the account of all aspects of Minimum wage criteria. Some Blog said it will be 3.0.(Indeed it was gservants.com also posted an article on [SEE] 7th Pay Commission Projected Pay Scale on 11th February 2013 and suggested 3.0 would be the Multiplication Factor to be used for arriving revised Pay.) Finally it is ended up with 2.86 as Federation Sources who met 7th Pay Commission revealed this information.
What is that 30% increase on Pay ? How much one get from this 30 percentage of hike ?
What is that 3.7 or 3.0 or 2.86 Multiplication Factor aka Fitment Formula? How much increase is one can get from these criteria…?
One need to understand the fact that there is no much difference between multiplication factor and percentage of increase over Pay. But the fact is there has been lot of difference between one’s understanding about what is Multiplication factor and Percentage of Increase in pay. It has been misconstrued by not only News Media but also by people who are authoring blogs.
The Fitment Formula and the Percentage of increase over Salary are not entirely different. The Percentage of Increase in salary can be defined as how much amount one will get more than his last drawn salary after pay commission recommendation is implemented. If the Pay Commission decides to give 40 Percentage of increase in salary, how does it can be calculated to arrive in the Pay and Allowances of a government servant..? First we have to determine the Basic Pay on which Pay and Allowances will be calculated. There comes the Fitment formula to play a vital role in arriving revised pay with above said increase.. [SEE: HOW the Fitment formula 2.86 Arrived?]
The Fitment formula aka Multiplication Factor would be arrived by incorporating the amount of Hike Proposed to be given in Pay Revision. The Fitment Formula is used for calculating the Basic Pay of a government servant on the date which is due for 7th CPC to be implemented after Pay revision. The Fitment formula is not inbuilt with all allowances so it cannot be applied to calculate Total Salary. It is only used to calculate one’s basic pay in order to give weightage to the total increment he earned. Since the weightage method which was introduced in fifth pay commission has not served its purpose, Multiplication Factor was used in Sixth Pay Commission to give the benefit of Pay Revision equally with respect to the increment earned. But the percentage of increase, it decided to give, had been given in the form of Grade Pay.
The Fifth Pay Commission adopted the method of giving 40% of the end pay of the Particular Pay scale as benefit of increase to that Pay Scale in the name of Grade Pay. Pay in the Pay band for that particular Grade Pay was arrived by using Multiplication Factor 1.86 with existing Basic Pay.
So there is nothing wrong in suggesting that what would be the multiplication Factors or Fitment formula for 7th Pay Commission, because that includes the percentage of increase to be offered.
What is it wrong is misunderstanding the fact and started misinterpreting the same by writing that government employees going to get multifold income because NCJCM says it was 3.7 and Blogs were saying that is 3.0 and 2.86. This factor is not supposed to be used for multiplying with one’s salary to arrive his revised salary. It is to be used to arrive his revised Basic Pay from his pre revised basic pay. That includes percentage of Dearness Allowance paid so far. Thus DA becomes zero from the date of implementation of 7th Pay commission.
It will be cleared from the following table that fitment formula 3.0 doesn’t mean that 3 times of salary. It is just 40% increase of existing pay and Dearness Allowance.[Dearness Allowance becomes Zero after it is added to Basic Pay] Assuming the percentage of DA as 119 % with DA to be granted from July 2015 the Percentage of Increase in Basic Pay will be as follows
|SOURCE||FITMENT FORMULA||PERCENTAGE OF INCREASE|
|NCJCM STAFF SIDE||3.7||70|
If the DA for second installment which will be due from January 2016 (assuming that as 6%) is counted in the Fitment Formula the Percentage of the increase will be lesser than the above said Fitment formula suggested for 7th Pay commission.
|SOURCE||FITMENT FORMULA||PERCENTAGE OF INCREASE|
|NCJCM STAFF SIDE||3.7||65|
So News Media and Economists are requested that they need not to panic about what the cg employees will be offered by 7th pay commission. Because the hike will not be as much as you expected and that too will not be a big burden for the Indian Economy, since it is going to be spent for people belongs to working class of this country.