The government has recently proposed the 8th Pay Commission for central employees, which is expected to benefit over one crore government employees and pensioners by increasing their salaries and pensions. After this announcement, many are eager to know how much their monthly income will rise. A new formula has surfaced that offers insights into the expected salary hikes for employees from level 1 to level 10.
The Role of the Akroyd Formula in Salary Hike
Like the 7th Pay Commission, it is anticipated that the Akroyd formula will be used under the 8th Pay Commission to determine salary and pension revisions, keeping in mind the current economic conditions.
What is the Akroyd Formula?
Developed by Dr. Wallace Akroyd, this formula was designed to calculate the minimum cost of living. It suggests that wages should be determined based on the nutritional and essential needs of an average employee. Dr. Akroyd focused on fundamental necessities such as food, clothing, and housing while formulating a fair wage system.
The 15th Indian Labor Conference (ILC) officially adopted this formula in 1957 to set the minimum wage for an employee, their spouse, and two children.
Application of the Akroyd Formula in the 7th Pay Commission
According to a Financial Express report, the 7th Pay Commission used the Akroyd formula to increase the minimum basic salary of central government employees from Rs 7,000 to Rs 18,000.
Additionally, a fitment factor of 2.57 was applied to revise the salaries and pensions of central government employees. The pay matrix derived from this formula has been in effect since the 7th Pay Commission recommendations were implemented in 2016.
Expected Salary Increase Under the 8th Pay Commission
It is widely believed that the 8th Pay Commission will also adopt the Akroyd formula to adjust salaries according to inflation and current economic conditions. Reports suggest that the government may consider a fitment factor ranging between 1.92 and 2.86.
If the higher fitment factor of 2.86 is approved, the minimum basic pay for government employees could increase significantly from Rs 18,000 to Rs 51,480. Similarly, pensions could see a rise from Rs 9,000 to Rs 25,740.
Understanding the Fitment Factor
The salary and pension hike is calculated by multiplying the fitment factor with the current minimum wage or pension amount. However, the exact percentage increase under the 8th Pay Commission is yet to be confirmed. The central government is expected to soon announce the official structure of the 8th Pay Commission, including details about the chairman and committee members.
Stay tuned for further updates on how the 8th Pay Commission will impact salaries and pensions for government employees!
