7th Pay Commission: There is great news for central employees. Employees are going to get 3 gifts from the government on New Year. There will be a significant increase in salary. In October, dearness allowance of employees was increased by 4 percent. Due to which dearness allowance increased from 42 to 46 percent.
7th Pay Commission: This year there has been a total percentage increase in dearness allowance of central employees. But, many more gifts are awaited. Now only 15 days are left for the year to end. After this the journey of the new year will begin.
In the new year, the gifts will also be new and more. After the increase in DA in October, now the dearness allowance (DA Hike) of the employees will be revised in the new year. But, along with it, increase in Travel Allowance (TA), HRA is also possible. Also, the biggest update is going to be on the fitment factor.
There has been no change in fitment factor for many years
Based on the recommendations of the Seventh Pay Commission, Fitment Factor was implemented to increase the minimum basic salary of central employees. Due to imposition of fitment factor, the minimum salary of central employees directly increased from Rs 6000 to Rs 18000. The fitment factor was determined to be 2.57 times. However, as per the recommendations, it was said to be kept at 3.
If it were 3 then the minimum salary would be Rs 21,000. But, the central employees demanded to keep it at 3.68. Since then this matter is pending. Even after many years there has been no change in the fitment factor. But, now good news is coming.
Fitment factor can increase so much
The good news for Central Employees is that their fitment factor may be revised in the new year. If sources are to be believed, the central government is preparing to please the employees. In such a situation, their fitment can be increased from 2.57 times to 3 times. However, this will also be much less than the current demand. But, even if it is increased by 3 times, there will be a significant increase in the salary of the employees as per their pay band.
Know what is Fitment Factor?
As per the recommendations of the Seventh Pay Commission, the fitment factor is 2.57 times. While fixing the salary of central employees, apart from allowances like Dearness Allowance (DA), Traveling Allowance (TA), House Rent Allowance (HRA) etc., the basic salary of the employee is taken into account as per the fitment of 7th Pay Commission (7th Pay Commission latest update). Factor (Fitment Factor Hike) is calculated by multiplying it by 2.57.
For example- if the basic salary of a central employee is Rs 18000, then his total salary excluding allowances will be 18,000 X 2.57 = Rs 46,260. If this is considered as 3 then the salary will be 21,000X3 = Rs 63,000. Central employees will get bumper benefits in this.
Calculation of allowances
When the salary of a central employee is fixed, then all kinds of allowances are added, like DA, TA, HRA, medical reimbursement, etc. After the increase in Dearness Allowance (DA Hike), TA is increased on the same basis. Increase in DA is also linked to TA. Similarly, House Rent Allowance (HRA) and medical reimbursement are also decided. When all the allowances are calculated then the monthly CTC of the central employee is decided.
Contribution of PF, Gratuity
After all the allowances and salaries are finalized, now comes the monthly Provident Fund (PF) and gratuity contribution. PF and gratuity contribution is linked to basic salary and dearness allowance (DA). The PF and gratuity of a central employee is decided by its formula. When all the allowances and deductions are made from CTC then the take home salary of the central employee is decided.
Government clarified on old pension scheme
On the other hand, the government has once again made its stand clear in the Lok Sabha on Monday regarding whether the Employees’ Old Pension Scheme (OPS) will be reinstated or not. Minister of State for Finance Pankaj Chaudhary said regarding the restoration of OPS (Old Pension Scheme) that the government does not have any such proposal. On behalf of the Central Government, Minister of State in the Finance Ministry, Pankaj Chaudhary told in the Lok Sabha that the government does not have a proposal regarding restoration of OPS for the Central Government employees.
A committee has been constituted under the chairmanship of the Finance Secretary to look into the issues related to the National Pension System (NPS) implemented for Central Government employees and to make any necessary changes.
