Central government employees get a 3% annual increment in the 7th Pay Commission. Employee bodies in their recommendations to the 8th Pay Commission have requested increasing the 3% increment substantially. They argue that a 3% annual salary increment is insufficient as the basic salary don’t even get double in 10 years. These employee bodies have recommended increasing it to at least 5% annually. These bodies say that a 5% annual increment and merging dearness allowance (DA) with basic pay when the DA reaches at 25% can substantially boost salaries of central government employees. Bankbazaar, in an illustration, shows how Level 1-8 employees can get up to Rs 20.59 lakh extra basic pay in 10 years, if the 8th Pay Commission decides on a 2.1 fitment factor and increases the annual increment rate from 3% to 6%. What central government employee bodies have recommended about annual increment? National Council of the Joint Consultative Machinery (NC-JCM), the main central government employee body in India, in its memorandum submitted to the 8th Pay Commission, has suggested increasing the annual increment to 6%. All India Defence Employees’ Federation (AIDEF), the body that represents defence civilian employees, and Federation of National Postal Organisations (FNPO) have also suggested increasing the annual increment to 6%. On the other hand, All India New Pension Scheme Employees Federation (AINPSEF) recommends the increment to be 7% annually. Indian Railways Supervisors’ Association (IRTSA) wants the annual increment to rise to 5%. Employee bodies’ recommendations for annual increment from 8th Pay Commission Organisation Proposed Annual Increment National Council of the Joint Consultative Machinery (NC-JCM) 6% All India Defence Employees' Federation (AIDEF) 6% Federation of National Postal Organisations (FNPO) 6% All India New Pension Scheme Employees Federation (AINPSEF) 7% Indian Railways' Supervisors' Association (IRTSA) 5% Source: Official memorandum submitted to 8th Pay Commission How higher annual increment can benefit central government employees Bankbazaar in its calculations for Level 1, 4, 6 and 8 employees show how they may get up to Rs 20.56 extra basic pay in 10 years if the 8th Pay Commission settles on a 2.1 fitment factor and decides on increasing the annual increment rate from 3% to 6%.For Level 1 employees, salary benefit in 10 years at 3% vs 6% annual pay increment Basic pay - Level 4 ₹ 18,000.00 Revised basic @ x2.1 ₹ 37,800.00 Year Monthly Basic (with 3% Increment) Annual Salary (3%) Monthly Basic (with 6% Increment) Annual Salary (6%) 1 ₹ 37,800 ₹ 4,53,600 ₹ 37,800 ₹ 4,53,600 2 ₹ 38,934 ₹ 4,67,208 ₹ 40,068 ₹ 4,80,816 3 ₹ 40,102 ₹ 4,81,224 ₹ 42,472 ₹ 5,09,665 4 ₹ 41,305 ₹ 4,95,661 ₹ 45,020 ₹ 5,40,245 5 ₹ 42,544 ₹ 5,10,531 ₹ 47,722 ₹ 5,72,660 6 ₹ 43,821 ₹ 5,25,847 ₹ 50,585 ₹ 6,07,019 7 ₹ 45,135 ₹ 5,41,622 ₹ 53,620 ₹ 6,43,440 8 ₹ 46,489 ₹ 5,57,871 ₹ 56,837 ₹ 6,82,047 9 ₹ 47,884 ₹ 5,74,607 ₹ 60,247 ₹ 7,22,969 10 ₹ 49,320 ₹ 5,91,845 ₹ 63,862 ₹ 7,66,348 Total pay in 10 years ₹ 52,00,016 ₹ 59,78,809 Extra pay in 10 years ₹ 7,78,793 In the calculations, you can see that even a Level 1 employee can earn nearly Rs 7.79 lakh extra basic pay in 10 years if the fitment factor is 2.1 and the annual salary increment in 6% instead of 3%.For Level 4 employees, salary benefit in 10 years at 3% vs 6% annual pay increment Basic pay - Level 4 ₹ 25,500.00 Revised basic @ x2.1 ₹ 53,550.00 Year Monthly Basic (with 3% Increment) Annual Salary (3%) Monthly Basic (with 6% Increment) Annual Salary (6%) 1 ₹ 53,550 ₹ 6,42,600 ₹ 53,550 ₹ 6,42,600 2 ₹ 55,157 ₹ 6,61,878 ₹ 56,763 ₹ 6,81,156 3 ₹ 56,811 ₹ 6,81,734 ₹ 60,169 ₹ 7,22,025 4 ₹ 58,516 ₹ 7,02,186 ₹ 63,779 ₹ 7,65,347 5 ₹ 60,271 ₹ 7,23,252 ₹ 67,606 ₹ 8,11,268 6 ₹ 62,079 ₹ 7,44,950 ₹ 71,662 ₹ 8,59,944 7 ₹ 63,942 ₹ 7,67,298 ₹ 75,962 ₹ 9,11,540 8 ₹ 65,860 ₹ 7,90,317 ₹ 80,519 ₹ 9,66,233 9 ₹ 67,836 ₹ 8,14,026 ₹ 85,351 ₹ 10,24,207 10 ₹ 69,871 ₹ 8,38,447 ₹ 90,472 ₹ 10,85,659 Total pay in 10 years ₹ 73,66,689 ₹ 84,69,979 Extra pay in 10 years ₹ 11,03,290 Source: BankbazaarNote: Illustrative estimates based on assumed fitment factors and annual increment rates. Actual pay progression may differ. With a rise in basic pay, the 10-year salary benefit can be higher for higher levels of employees. Like a Level 4 employee may get up to Rs 11.04 lakh extra basic pay in 10 years.For Level 6 employees, salary benefit in 10 years at 3% vs 6% annual pay increment Current basic - Level 6 ₹ 35,400.00 Revised basic @ x2.1 ₹ 74,340.00 Year Monthly Basic (with 3% Increment) Annual Salary (3%) Monthly Basic (with 6% Increment) Annual Salary (6%) 1 ₹ 74,340 ₹ 8,92,080 ₹ 74,340 ₹ 8,92,080 2 ₹ 76,570 ₹ 9,18,842 ₹ 78,800 ₹ 9,45,605 3 ₹ 78,867 ₹ 9,46,408 ₹ 83,528 ₹ 10,02,341 4 ₹ 81,233 ₹ 9,74,800 ₹ 88,540 ₹ 10,62,482 5 ₹ 83,670 ₹ 10,04,044 ₹ 93,853 ₹ 11,26,230 6 ₹ 86,180 ₹ 10,34,165 ₹ 99,484 ₹ 11,93,804 7 ₹ 88,766 ₹ 10,65,190 ₹ 1,05,453 ₹ 12,65,433 8 ₹ 91,429 ₹ 10,97,146 ₹ 1,11,780 ₹ 13,41,358 9 ₹ 94,172 ₹ 11,30,060 ₹ 1,18,487 ₹ 14,21,840 10 ₹ 96,997 ₹ 11,63,962 ₹ 1,25,596 ₹ 15,07,150 Total pay in 10 years ₹ 1,02,26,697 ₹ 1,17,58,324 Extra pay in 10 years ₹ 15,31,626 Source: BankbazaarFor Level 8 employees, salary benefit in 10 years at 3% vs 6% annual pay increment Basic Pay - Level 8 ₹ 47,600.00 Revised basic @ x2.1 ₹ 99,960.00 Year Monthly Basic (with 3% Increment) Annual Salary (3%) Monthly Basic (with 6% Increment) Annual Salary (6%) 1 ₹ 99,960 ₹ 11,99,520 ₹ 99,960 ₹ 11,99,520 2 ₹ 1,02,959 ₹ 12,35,506 ₹ 1,05,958 ₹ 12,71,491 3 ₹ 1,06,048 ₹ 12,72,571 ₹ 1,12,315 ₹ 13,47,781 4 ₹ 1,09,229 ₹ 13,10,748 ₹ 1,19,054 ₹ 14,28,648 5 ₹ 1,12,506 ₹ 13,50,070 ₹ 1,26,197 ₹ 15,14,366 6 ₹ 1,15,881 ₹ 13,90,572 ₹ 1,33,769 ₹ 16,05,228 7 ₹ 1,19,357 ₹ 14,32,290 ₹ 1,41,795 ₹ 17,01,542 8 ₹ 1,22,938 ₹ 14,75,258 ₹ 1,50,303 ₹ 18,03,635 9 ₹ 1,26,626 ₹ 15,19,516 ₹ 1,59,321 ₹ 19,11,853 10 ₹ 1,30,425 ₹ 15,65,102 ₹ 1,68,880 ₹ 20,26,564 Total pay in 10 years ₹ 1,37,51,153 ₹ 1,58,10,627 Extra pay in 10 years ₹ 20,59,475 Source: BankbazaarA Level 8 employee may get up to Rs 20.60 lakh extra total basic salary in 10 years at a 2.1 fitment factor and a 6% annual increment. The salary benefit can be higher if the fitment factor is higher than 2.1.Assumptions for annual increment calculations Basic salary= As per 7th Pay Commission Revised salary - Basic pay x fitment factor (2.1)Annual increment (at 3%) of revised basic payTotal salary in 10 years (at 3% increment)Annual increment (at 6%) of revised basic payTotal salary in 10 years (at 6% increment)Extra salary in 10 years = (Total pay in 10 years at 6% annual increment) - (Total pay in 10 years pay at 3% annual increment)