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The central government has proposed the 8th Pay Commission, which is expected to bring salary and pension hikes for over 1 crore government employees and pensioners. With this announcement, many are curious to know how much their monthly income will increase under the new pay structure. Reports suggested that a formula similar to the 7th Pay Commission will be used to determine salary increments for employees across Level 1 to Level 10.
What is the Aykroyd formula?
The Aykroyd Formula, developed by Dr. Wallace Aykroyd, was designed to determine the minimum cost of living. It suggests that wages should be calculated based on an average worker’s nutritional, clothing, and housing needs. The formula was officially adopted by the 15th Indian Labour Conference (ILC) in 1957 to set a minimum wage for a worker, their spouse, and two children.
How 7th Pay Commission implemented the Aykroyd Formula
According to a report by Financial Express, the 7th Pay Commission applied the Aykroyd Formula to increase the minimum basic salary from Rs 7,000 to Rs 18,000. It also introduced a fitment factor of 2.57, which helped in revising the pay matrix for government employees and pensioners. This formula has been in effect since 2016.
How much salary hike under 8th Pay Commission?
Experts believe that the 8th Pay Commission is likely to follow the Aykroyd Formula to ensure that government employees’ salaries align with rising inflation. Reports suggested that the government is considering a fitment factor between 1.92 and 2.86.
If the upper limit of 2.86 is applied, the minimum basic salary could increase from Rs 18,000 to Rs 51,480.
Similarly, pension amounts could rise from Rs 9,000 to Rs 25,740.
How will salary and pension hikes be calculated?
The fitment factor plays a key role in determining salary and pension hikes. It is applied by multiplying the current minimum salary or pension amount by the chosen fitment factor. While the exact percentage of salary increments under the 8th Pay Commission is yet to be finalised, an official announcement regarding its structure, chairman, and members is expected soon.
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