Central and government employees are eagerly awaiting the recommendations of the 8th Departmental Commissionary Council, paying special attention to salary structure, fitment coefficient, and annual increment. The commission team is in constant consultation with employees, pensioners, and their trade unions.
Following consultations in various locations, including Delhi, Ladakh, Uttar Pradesh, and West Bengal, memoranda reflecting the demands of employees and pensioners were submitted. Among the main demands are changes to the pay structure, an increase in the fitment coefficient, and an increase in the annual growth rate.
Currently, central employees receive an annual increment of 3% under the 7th Departmental Commissionary Council, but trade unions are demanding an increase. Organizations such as NC-JCM, AIDEF, and FNPO have proposed raising the annual increment to 6%, while AINPSEF requested 7%, and IRTSA requested 5%. Thus, the demands of various trade unions range from increasing the increment rate from the current 3% to the level of 5-7%.
The question being considered is: what is more beneficial for employees—an increase in the fitment coefficient or an increase in annual indexation? Analysis shows that if the annual indexation increases from the current 3% to 7%, the long-term impact can be quite significant. According to calculations, with a remaining service period of 30 years, the basic pay could reach approximately 4.27 lakh rupees at a 7% annual increment. In contrast, with a fitment coefficient of 2.57 times, this amount would be around 3.50 lakh rupees.
Increasing the fitment coefficient has an immediate impact on salary because the existing basic pay is adjusted in the new pay structure. However, in the long term, the annual increment plays a critical role. Annual indexation increases the employee's basic pay, and the next increment is applied to this increased base. This leads to a compound interest effect over time. This is especially noticeable for employees who have 15, 20, or 30 years of service remaining, as even a small change in the indexation rate can create a substantial difference in the future.
To illustrate this, a hypothetical example can be used. Suppose the basic pay of a Level-10 central employee is 56,100 rupees. Based on this amount, different scenarios can be projected for 15 and 30 years. If a 7% annual indexation is maintained, the basic pay could reach approximately 4.27 lakh rupees in 30 years. Conversely, after the initial change based on a fitment coefficient of 2.57x, the basic pay after 30 years would be about 3.50 lakh rupees. This calculation indicates that for employees with long service, the continuous increase in indexation may be more significant.
According to the projections presented, a 7% annual indexation could lead to a basic pay increase of up to 4.27 lakh rupees over 30 years, exceeding the projection of 3.50 lakh rupees with a 2.57x fitment coefficient. Nevertheless, the benefit of annual indexation is not immediate; its significant impact only becomes apparent after many years. Therefore, it is important for employees to consider not only the initial fitment coefficient but also the combination of the fitment coefficient with annual indexation.
Demands for an annual indexation of 5% to 7% are currently being put forward regarding the 8th Departmental Commissionary Council, but the government has not yet approved any of these rates. Similarly, a final decision on the fitment coefficient has not been made. The 8th Departmental Commissionary Council, chaired by former judge Ranjana Prakash Desai, is currently holding discussions with various stakeholders. The commission may present its recommendations and final report to the government by May-June 2027.
Precise answers regarding the fitment coefficient amount, the set annual indexation rate, and the implementation procedure for the new pay structure will only become clear after the final recommendations of the 8th Departmental Commissionary Council and approval by the government. However, it is known that for employees with 15–30 years of service remaining, a change in the annual indexation rate can have a major impact in the long run.
