The government has proposed the 8th Pay Commission for central employees, bringing potential increases in salary, pension, and allowances for over 1 crore government employees and pensioners. This has sparked curiosity about the expected salary hike. Based on previous trends, experts suggest that the Akroyd formula, used in the 7th Pay Commission, may once again be applied to determine the revised pay scale.
What is the Akroyd Formula?
The Akroyd formula, developed by Dr. Wallace Akroyd, calculates wages based on the minimum cost of living. This approach considers the basic needs of an employee—food, clothing, and housing—to ensure fair wages. The 15th Indian Labor Conference (ILC) adopted this formula in 1957 to determine the minimum wage for a household consisting of an employee, their spouse, and two children.
Akroyd Formula in the 7th Pay Commission
According to a Financial Express report, the 7th Pay Commission applied the Akroyd formula and raised the minimum basic salary of central government employees from ₹7,000 to ₹18,000.
In 2016, the 7th Pay Commission introduced a fitment factor of 2.57, which played a key role in updating salaries and pensions. This fitment factor, combined with the Akroyd formula, formed the basis of the new pay structure implemented at the time.
Expected Salary Hike in the 8th Pay Commission
Experts believe the 8th Pay Commission will also follow the Akroyd formula to ensure that government salaries keep pace with inflation. Reports indicate that the fitment factor in the new pay structure could range between 1.92 and 2.86.
If the upper limit of 2.86 is applied, the minimum basic salary of a government employee could rise from ₹18,000 to ₹51,480—a significant increase. Similarly, pensions could rise from ₹9,000 to ₹25,740.
Understanding the Fitment Factor
The fitment factor is a crucial multiplier used to determine salary and pension hikes. It is applied to the current minimum wage or pension amount to calculate the revised figures. However, the exact percentage of salary increase under the 8th Pay Commission is yet to be confirmed.
What’s Next?
The central government is expected to announce the official structure of the 8th Pay Commission soon, including the appointment of a chairman and two members. Once finalized, this will provide more clarity on the salary and pension revisions for government employees.
Stay tuned for further updates!
