In future, the remuneration of Central-government employees will in all likelihood be fixed by a new system known as the Aykroyd formula, instead of the 7th Pay Commission.
The formula takes its name from Wallace Ruddell Aykroyd— well known nutritionist and first director of the Department of Nutrition, Food and Agricultural Organisation or FAO—whose recommendations were based on the food and clothing requirements of the people of the country.
Earlier, under the automatic pay regimen, the Government would just revise the salaries if there was a hike of over 50 per cent in dearness allowance (DA). The Aykroyd Formula will now take into account the inflation and the performance of the employees while fixing the remuneration. It will arrive at an appropriate pay package such that all the basic needs of life are met in a comfortable manner.
Aykroyd also took into account change in the price of commodities that are essential to the commoners and are most likely to impact them.
It is reported that based on the Aykroyd Formula, and after taking into consideration other significant factors, the minimum monthly pay for a government employee is recommended to be fixed at Rs.18000.
A new pay matrix has come into play, wherein the status of the employee— which was earlier decided on the basis of grade pay— will now be decided on the basis of where they are placed in the pay matrix.
The minimum pay calculated as per the Aykroyd Formula forms the starting point of the matrix. The ‘horizontal range’ of the pay matrix level corresponds to a ‘functional role in the hierarchy’. Therefore, as the employees climb the hierarchy, they move from one level to the other. The ‘vertical range’ for each level represents the ‘pay progression’ within that level and the employee will move vertically within each level as per the yearly financial progression of three percent.
Civilians, defence personnel and military nurses are covered under different pay matrices. While all the existing levels have been incorporated in the new structure, no new levels have been added.
This system will now decide the emoluments of the 68 lakh Central government employees and 52 lakh pensioners in the country.