Multiplication Factor / Fitment Formula recommended by 7th Pay Commission
7th Pay Commission recommended the Multiplication Factor is 2.57
Fitment : The starting point for the first level of the matrix has been set at ₹18,000. This corresponds to the starting pay of ₹7,000, which is the beginning of PB-1 viz., ₹5,200 + GP 1800, which prevailed on 01.01.2006, the date of implementation of the VI CPC recommendations.
Hence the starting point now proposed is 2.57 times of what was prevailing on 01.01.2006. This fitment factor of 2.57 is being proposed to be applied uniformly for all employees. It includes a factor of 2.25 on account of DA neutralisation, assuming that the rate of Dearness Allowance would be 125 percent at the time of implementation of the new pay. Accordingly, the actual raise/fitment being recommended is 14.29 percent.
7th Pay Commission Fitment Table : National Council JCM Staff Side suggested in their memorandum regarding fitment formula as follows…
The fitment formula suggested by all the earlier Pay Commissions was not reflective of the actual revision of wages. The employees who were on rolls on the date of implementation of the Commission’s recommendation comparatively received lesser benefit than the new entrants. Amongst the existing employees also, more benefit accrued to persons with lesser service period. This happened due to the rejection of the demand of the Staff Side to have point to point fixation.
The anomalous situation was addressed during the discussion the Staff Side had with the Group of Ministers in September 1997, over the implementation of the recommendations of the 5th CPC. In the place of 20% of the basic pay recommended by the 5th CPC as fitment formula the Staff Side could negotiate and settle it at 40%. The said agreement brought about near total satisfaction over the revision benefit amongst all sections of employees. The said 40% benefit brought about uniform multiplication factor too.
Taking these in to consideration, we suggest that the multiplication factor (26000/7000 = 3.7) may be applied uniformly in all the cases to arrive at the revised pay in the new scale of pay.