8th Pay Commission: Minimum Salary Of Rs 36,000 — What Key Stakeholders Expect

The Union government's nod for the formation of the 8th Pay Commission shifts the focus on the recommendations to be made on fitment factor and other modalities for the revision of salaries and pensions.

Key stakeholders who will be part of the deliberations have shared their expectations with NDTV Profit. M Raghavaiah, the leader (staff side) of the National Council-Joint Consultative Machinery, expects the "minimum salary to be revised to Rs 36,000" for central government employees.

The NC-JCM is an official platform to resolve all disputes between the government and its staff through dialogue. It comprises employee union leaders and bureaucrats, and is headed by the Union cabinet secretary.

"We want the 8th Pay Commission to rely on Dr Aykroyd's formula to revise the minimum living wages. I expect it to be raised to at least Rs 36,000," said Raghavaiah, who is also the general secretary of the National Federation of Indian Railwaymen.

Dr Aykroyd's formula is linked to 20th-century American nutritionist Wallace R Aykroyd. The formula takes into consideration the increase in prices of various commodities that constitute a common person's basket, which is reviewed periodically by the Labour Bureau in Shimla.

Raghavaiah said that in August, he had met Prime Minister Narendra Modi and formally requested the revision of minimum wages to Rs 32,500. "I had sought that revision based on Dr Aykroyd's formula, which was used by the 7th Pay Commission to arrive at a minimum living wage of Rs 18,000 in 2016. At that time, our demand was to immediately revise the minimum wage while immediately forming the 8th Pay Commission."

With the 8th Pay Commission now being formed, Raghavaiah said he expects the panel to recommend fixing the minimum wage at Rs 36,000, instead of Rs 32,500, taking into consideration the current pace of inflation.

If Raghavaiah's demand of Rs 36,000 as minimum wage is accepted by the 8th Pay Commission, then it would mean that the panel would recommend a fitment factor of 2.0.

Fitment factor is the multiplier used for raising the salaries across the pay matrix, and not only for the increasing the minimum wages. It is also applicable for the revision of pensions.

Since the 7th Pay Commission fixed the minimum salary at Rs 18,000, its revision to Rs 36,000 would require a fitment factor of 2.0 (Rs 18,000 X 2).

The 8th Pay Commission, after being formally set up with a chairperson and two members, will hold deliberations with an array of stakeholders before submitting its report that entails the proposed fitment factor and other modalities for salary and allowance revision. The stakeholders include public sector undertakings, state governments, central trade unions and employee forums, among others.

The fitment factor of 2.0, as suggested by Raghavaiah with his demand of Rs 36,000 minimum wage, is lower than the fitment factor of 2.86 demanded by his NC-JCM colleague Shiv Gopal Mishra.

Mishra, who is the secretary (staff side) of NC-JCM, told NDTV Profit in an earlier conversation that he is looking at a fitment factor of not less than 2.86.

"Considering that this kind of revision happens only once in 10 years, we will certainly demand a fitment factor that is higher than what the 7th Pay Commission had recommended. And it should be at least 2.86," said Mishra, who is also the general secretary of the All India Railwaymen's Federation.

The 7th Pay Commission had proposed a fitment factor of 2.57. This was accepted by the government, and the minimum salary of central government employees was raised to Rs 18,000 from Rs 7,000. Similarly, the minimum pensions rose from Rs 3,500 to Rs 9,000.

If 2.86 is proposed as the fitment factor for salary revision by the 8th Pay Commission, then the minimum wage of employees can rise from Rs 18,000 to Rs 51,480. Similarly, the pensions could rise from Rs 9,000 to Rs 25,740.