Discussions about salary reform for Central Government Employees have gained momentum due to the rising inflation in the country. With the 7th Pay Commission set to conclude on December 31, 2025, there is growing curiosity about whether the government will introduce the 8th Pay Commission or opt for a different salary determination method.
Recent information suggests that the government is considering the Aykryod Formula. Here are some key highlights of this update.
Focus on increasing the basic salary
Under the 7th Pay Commission, employee salaries were adjusted based on the fitment factor. However, this time, the government may propose an annual salary revision. This would mean that the salaries of central employees could be adjusted each year in line with inflation rates and the cost of living.
The government’s plan includes an annual increase in the basic salary. Experts believe that this new approach might be linked to performance-based increments.
Ackroyd Formula: What is this new formula?
The Ackroyd formula proposes that employee salaries be determined based on factors such as inflation rates, the cost of living, and overall living standards. This concept has been under discussion for quite some time, and there are now plans to move forward with its implementation. At present, the salaries of central government employees are calculated using a fitment factor and dearness allowance, which are adjusted biannually.
Equal Benefit Plan
The government aims to address pay disparities among employees across all categories. The Ackroyd formula is designed to establish a pay fixation system similar to that of private sector companies. This approach will ensure that all employees receive equal benefits and help close the significant salary gaps based on grade pay.
Why is the new formula necessary?
Finance Ministry officials emphasize that this new formula is crucial for enhancing the financial well-being of central government employees. The Seventh Pay Commission’s recommendations highlighted the need for new strategies to replace the existing Pay Commission framework.
This formula will guarantee regular salary increases for employees in line with inflation and the rising cost of living, ultimately boosting their purchasing power and providing greater financial security.
