Multiplication Factor – A Crucial Indicator for determining the Basic Pay of 7th Pay Commission

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Multiplication Factor – A Crucial Indicator for determining the Basic Pay of 7th Pay Commission

It is well known that Multiplication Factor 1.86 was being used by the 6th Pay Commission to calculate the new revised basic pay. The 6th Pay Commission had initially suggested 1.74, but it was later modified to 1.86.

The Multiplication Factor was arrived at by adding dearness allowance percentage to the basic pay with a simple methodology. The 6th Pay Commission also brought in a new concept called the Grade Pay. So, the basic pay diveded into two segments, which are called as Band Pay and Grade Pay.

Now that Grade Pay is not going to be included, it remains a mystery as to how the 7th Pay Commission will calculate the new Multiplication Factor.

A lot of speculations are now on about this.

With plenty of rumours afloat that salaries for Central Govt employees could increase twofold, an article was published by 90Paisa Blog recently, which claimed that only a 30% hike in salary is sure to come. The article had used a Multiplication Factor of 2.68.

Last month, claimed that the 7th Pay Commission may recommend a Multiplication Factor of 2.86. The website created waves when it published a projected basic pay structure by using a Multiplication Factor of 3.

The NC JCM Staff Side, in its memorandum to the 7th Pay Commission, suggested that a Multiplication Factor of 3.7 be used for calculation of new basic pay. They had also given a detailed explanation for it.

And one more, the Karnataka COC, which is an organization for Central Government employees, had demanded a Multiplication Factor of 3.85, and gave its own reasons for it.

All these are mere speculations…!

It’s up to the employees to believe what they want to.

We have given a calculator to find out the new basic pay based on the most likely Multiplication Factor that could be recommended by the 7th Pay Commission.

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