How pay commissions decide salary hikes of central govt staff

The Eighth Central Pay Commission (CPC)is set to revise the compensation structure for over 4.7 million central government employees & 6.8 million pensioners.

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The fitment factor serves asa multiplier applied to an employee’s existing basic pay to determine the revised basic pay, explains KR Shanmugam

Rationale for pay revisions

WHILE ANNUAL INCREMENTS (usually 3% of basic pay) reward experience and seniority, and dearness allowance (DA) or dearness relief for pensioners offsets inflationary effects, a pay commission revision represents an overhaul of the entire compensation system. It resets the basic pay, from which future increments and DA accumulate and rebalances pay structure, allowances and pensions.