8th Pay Commission: It is estimated that under the 8th Pay Commission, like the 7th Pay Commission, the Acroyd formula will be used for salary and pension hike for central government employees, keeping in mind the current economic conditions.
8th Pay Commission: The government has recently proposed the 8th Pay Commission for central employees, under which the pension and allowances of more than 1 crore government employees and pensioners will increase. After the announcement of the 8th Pay Commission, people want to know how much the monthly income of central employees and pensioners will increase? Now a formula has come out regarding this, from which it can be estimated how much the salary of employees from level 1 to 10 can increase.
It is estimated that under the 8th Pay Commission, like the 7th Pay Commission, the Acroyd formula will be used for salary and pension hike for central government employees, keeping in mind the current economy conditions.
What is the Acroyd formula?
The formula was created by Dr Wallace Ackroyd and was designed to determine the minimum cost of living. It suggested that wages should be calculated based on the nutritional needs of the average employee. Dr Ackroyd focused on the basic needs of employees such as food, clothing and housing while developing this formula for fair wages. The 15th Indian Labour Conference (ILC) adopted this formula in 1957 to establish a minimum wage for an employee, their spouse and two children.
7th Pay Commission and Ackroyd Formula
According to a report by Financial Express, the 7th Pay Commission had increased the minimum basic salary for central government employees from Rs 7,000 to Rs 18,000 using the Ackroyd formula.
Nearly a decade ago, the 7th Pay Commission applied a fitment factor of 2.57 to update the salaries and pensions of central government employees and pensioners. The pay matrix based on this fitment factor and the Akroyd formula has been in effect since the implementation of the 7th Pay Commission recommendations in 2016.
How much will the salary increase under the 8th Pay Commission on this formula?
It is believed that the Akroyd formula will also be adopted under the 8th Pay Commission, to ensure that the salary of government employees is fair according to today’s inflation. Reports suggest that the government may consider a fitment factor between 1.92 and 2.86. If the higher end of the range, 2.86, is chosen, the minimum basic salary for government employees could potentially rise to Rs 51,480, much higher than the current Rs 18,000. Apart from this, the pension can increase from Rs 9,000 to Rs 25,740.
Fitment factor
The calculation of salary and pension increase is decided by multiplying the fitment factor with the current minimum wage or pension amount. What will be the percentage of salary increase under the 8th Pay Commission? It is not clear yet. It is expected that the central government will soon announce the structure of the 8th Pay Commission, which will include a chairman and two members.
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