Big Update on 8th Pay Commission: New minimum pay formula can come for central employees, approved soon!

There is a big change in their salary structure for millions of central employees of the country. According to reports, the government is considering a new formula to determine the minimum wage of employees, moving away from the traditional pay commission system. If this proposal is approved, it can completely change the method of formation and its recommendations of the 8th Pay Commission or eliminate the need for regular formation of the Pay Commission.

What is the proposed new formula?

It is being told that this new formula may be based on Dr. Aykroyd Formula, which suggests the cost of spending on the cost of living, inflation (inflation) and their performance, the cost of spending increments.

• Cost of living and inflation: Under this formula, the minimum wage can also be linked to inflation data, just like dearness allowance (DA). As inflation increases, minimum wage can also increase automatically.

• Performance based growth: In addition, the performance of the employees can also be made a criteria for increment.

How to separate from the traditional pay commission?

So far, a Pay Commission is formed every 10 years, which recommends amendment in salary, allowances and pension after detailed studies. This process takes a lot of time.

The proposed new formula may allow more dynamic adjustment in salary, possibly on an annual basis. With this, employees will not have to wait for the recommendations of the next pay commission for a long time.

Current Status:

• The 7th Pay Commission came into force in 2016 and as per its recommendations, the minimum wage was fixed at ₹ 18,000 per month.

• Employees Union have been demanding the formation of the 8th Pay Commission or an increase in minimum wages for a long time.

• It is believed that if the new formula is adopted, the minimum wage increased from the current ₹ 18,000 Around ₹ 26,000 Or may be higher, although it will depend on the final calculation and nuances of the formula.

What next?

According to reports, the Terms of Reference (Tor) of this new minimum wage formula may be approved soon. If this happens, it will be a great relief for the central employees, as they will expect them to get a proper increase in their salary in the midst of increasing inflation. However, the final decision on this is to be taken by the government and will have to wait for the official announcement.

This step can prove to be a significant improvement in the direction of transparency and continuity in the salary fixation process.