8th Pay Commission: With the Modi government announcing the 8th Pay Commission, all eyes are on how the next salary and pension revision for around 1.2 crore central government employees and pensioners will be done.
The Centre is very soon expected to announce the composition of the 8th Pay Commission, which will have two members under a chairman. Once it is officially formed, consultations with stakeholders will start to propose revised salaries and pensions for central government employees to the government.
It is expected that, as it happened with the 7th Pay Commission, the 8th Pay Commission will also use the Aykroyd formula to arrive at a decision concerning salary and pension hikes to be proposed for central government staff, considering the current economic realities. Let’s first understand the Aykroyd formula and how it shaped the 7th pay panel recommendations.
What is the Aykroyd Formula?
The Aykroyd formula was developed by Dr. Wallace Aykroyd, a nutritionist, to estimate the minimum cost of living. The formula suggested calculating wages based on the nutritional requirements of an average worker. Aykroyd focused on the essential needs of a worker, such as food, clothing, and housing, to develop the formula for calculating an ideal wage.
The formula was adopted by the 15th Indian Labour Conference (ILC) in 1957 to set minimum wages for a worker and their family, which includes a spouse and two children (equal to three consumption units).
The Aykroyd formula, stressing having a balanced diet including specific amounts of protein and fat, suggested a minimum of 2,700 calories for an adult to decide fair wage norms. The formula also highlights the importance of including animal proteins, like milk, eggs, and meat, for their higher nutritional value.
Also read: UPS: Know how much pension a central govt employee will get with less than 25 years of service – Formula explained!
How Aykroyd Formula was used in the 7th Pay Commission
The 7th Pay Commission had raised the minimum basic pay from Rs 7,000 to Rs 18,000 for central government employees, using the Aykroyd formula. This salary hike was calculated based on the cost of living and nutritional requirements at the time.
The 7th pay panel used a fitment factor of 2.57 to revise the salary and pension of central government employees and pensioners almost 10 years ago.
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