8th Pay Commission: What is Aykroyd Formula and how it helped last pay panel in deciding salaries

After the consultations, the Commission is expected to recommend the revised minimum pay considering all relevant factors.

The Commission drew up separate pay matrices for civilians, defence personnel, and military nursing service.

The use of the Aykroyd formula, coupled with updated market conditions, may guide the next panel in balancing employee welfare with the government's fiscal capabilities.

What is the Aykroyd Formula?

The Aykroyd formula, developed by Dr Wallace Aykroyd, a renowned nutritionist, determines the basic cost of living in a country. It factors in the nutritional requirements of an average worker and calculates the need-based minimum wage, covering essentials like food, clothing, housing, and other necessities.

The 15th Indian Labour Conference (ILC) in 1957 adopted this approach to establish norms for determining minimum wages. The ILC norms accounted for a worker's family needs, comprising a spouse and two children, equivalent to three consumption units.

In its report, the 7th Pay Commission noted the dual objectives of its pay structure: attracting talent while ensuring that government service remains financially sustainable. It highlighted that government service is not merely contractual but also provides societal status, a value beyond monetary compensation.

The panel used the Aykroyd formula to recommend a minimum pay of ₹18,000 per month for central government employees. This was based on the need-based minimum wage principles outlined by the ILC and reflected the cost of living at the time.

The food requirements, based on Aykroyd’s recommendations, specified a daily intake of 2,700 calories—comprising 65 grams of protein and around 45-60 grams of fat—for every Indian adult engaged in moderate activity. Dr Aykroyd had pointed out that animal proteins, such as milk, eggs, fish, liver and meat, are biologically more efficient than vegetable proteins and suggested that they should form at least one-fifth of the total protein intake.

The recommendations of the 8th Pay Commission will be closely watched, as they will impact not just the salaries and pensions of millions of government employees and pensioners, but also the economic trends such as consumption and inflation.