7th Pay Commission: Salary of Central Govt. Employees will Now Be Increased on the Basis of Performance

Lakhs of Central government employees in the country are eagerly waiting for the 8th pay commission but the Centre has made it clear that there isn’t any need to constitute a new pay commission.

The government is also working on a system known as ‘Aykroyd formula’ in which the salaries of the employees will be increased on the basis of their performance.

To make changes in the salary structure of the employees, after every 10 years, a pay commission is constituted. The salary of government employees is fixed on the basis of the recommendations of the commission. So far, seven pay commissions have been constituted. The 1st pay commission in the country was formed in January 1946 and the 7th pay commission was constituted on 28 February 2014.

Minister of State for Finance Pankaj Choudhary recently told Lok Sabha that at present there are no plans to constitute the 8th Pay Commission.

Salary to be hiked based on performance

The minister in the Lok Sabha said that the 8th Pay Commission will not be formed now. He said there should not be a need to set up another Pay Commission to review the salaries, allowances, and pensions paid to central government employees and pensioners. He informed that the government is working on a system Aykroyd formula to calculate salary or increment.

What is Aykroyd Formula

Under the Aykroyd formula, salaries of central government employees would be linked to inflation and also their performances. This formula is based on the recommendations of Wallace Ruddell Aykroyd, an acclaimed nutritionist who was the 1st director of the Department of Nutrition, Food and Agricultural Organization (FAO).

Aykroyd based his recommendations on the requirements like food and clothing of Indians. He took into consideration price changes in commodities that are likely to affect the common man. The method will help to formulate a pay package that helps in availing of life’s essentials.

Until now the Centre was revising the salaries under the automatic pay regime if there was a DA hike. But, with the Aykroyd formula, it will be easier to fix remuneration.

What is the Minimum Pay under 7th Pay Commission?

As per the official 7th CPC documents, "After considering all relevant factors and based on the Aykroyd formula the minimum pay in government is recommended to be set at Rs.18000 per month."

When asked what the government is doing to increase the salary of the employees in view of the inflation, the Minister said that for this they will be given Dearness Allowance. DA is given to the Central Government Employees to compensate for the loss in the real value of their salaries because of rising inflation. This rate is revised every six months on the basis of AICPI-IW data. As the first 6 months of this year are over, the employees, as well as pensioners, expect that the new DA or DR rate would be announced soon.