Modify Aykrod Formula, ensure a decent living wage under 8th CPC
Modify Aykrod Formula, ensure a decent living wage under 8th CPC
Bruhaspati Samal
General Secretary
Confederation of Central Govt Employees and Workers
Odisha State CoC, Bhubaneswar
The recent declaration of the 8th Central Pay Commission (CPC) by the Government on January 16, 2025, has reignited discussions on the pressing need to revise the outdated wage determination criteria in India. In response to the Government's request for suggestions on the proposed Terms of Reference for the CPC, the National Council–Joint Consultative Machinery (NCJCM) (Staff Side) submitted its recommendations on February 3, 2025. A crucial meeting was subsequently held on February 10, 2025, where the NCJCM Staff Side strongly advocated for modifications to the Dr. Aykrod Formula, which has been the foundation for determining minimum wages in India since its adoption by the 15th Indian Labour Conference in 1957.
One of the key issues raised by the Staff Side is the need to expand the family size considered under the Dr. Aykrod Formula. Currently, the formula calculates the minimum wage based on a family of three Consumption Units (CUs)—comprising an employee (1 CU), a spouse (0.8 CU), and two children (0.6 CU each). However, in light of contemporary social and legal considerations, the Staff Side has urged for an expansion to five CUs to include the employee's dependent parents (1 CU each). This demand aligns with the provisions of the Maintenance and Welfare of Parents and Senior Citizen Act, 2007, which establishes the moral and legal responsibility of wage earners to support their aging parents. Additionally, under Section 125 of the Criminal Procedure Code 1973, neglecting aged parents is considered an offense. The Hindu Adoption and Maintenance Act, 1956, also emphasizes the duty of children to provide for their parents. The Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and various central government rules further recognize dependent parents as part of the family, reinforcing the legitimacy of their inclusion in wage calculations. Above all, the Central Civil Services (Conduct), Rules, 1964 include the dependent parents of the Government employee in the definition of family for the purpose of availing Leave Travel Concession (LTC), Medical Treatment etc. The expansion of the Dr. Aykrod Formula to five CUs is essential to ensuring financial security for elderly parents who often face neglect and economic hardships.
It is an unfortunate reality that a significant number of elderly parents in India suffer from financial neglect despite their sacrifices for their children. Reports indicate that nearly 40% of senior citizens in India face economic hardships due to a lack of support from their children. In a country where the educated class is expected to set examples of moral and ethical conduct, it is disheartening to witness the growing number of cases where parents are left to fend for themselves. One of the main reasons for such estrangement and abandoning the old parents by Indian youths is money or finances. A study conducted in June 2020, by the NGO Agewell Foundation, 71 per cent of India’s elderly reported an increase in maltreatment during the first Covid-19 induced lockdown. As a result, now the concept of old-age home is mushrooming in Indian society where the neglected parents are being sheltered which is too piteous. According to the Report of the Technical Group on Population Projections for India and States 2011-2036, there are nearly 138 million elderly persons in India in 2021 and it is further expected to increase by around 56 million elderly persons in 2031. There are 18 million homeless elderly persons in India based on the Longitudinal Ageing Survey of India 2020. Currently, there are 728 old age homes, both private and public in India providing different geriatric services. The Government must take cognizance of this distressing trend and ensure that elderly parents are financially secure by mandating their inclusion in wage determination. Various international labour standards, including those set by the International Labour Organization (ILO), emphasize the necessity of fair wages that take into account all essential living expenses, including the care of elderly dependents. The Universal Declaration of Human Rights also emphasizes the right to a standard of living adequate for health and well-being, including food, clothing, housing, and medical care.
The Staff Side has also emphasized the necessity of redefining the components considered while determining minimum wages. The Dr. Aykrod Formula primarily accounts for food items, but it neglects essential ingredients such as salt and spices, which are indispensable for meal preparation. Additionally, beverages like tea and coffee, which have become fundamental to daily life, are currently excluded. With changing dietary habits, items such as packaged food, fortified grains, and ready-to-eat meals are becoming increasingly necessary, especially for working professionals who may not have the time for traditional cooking methods. Moreover, nutritional supplements, baby food, and protein-rich diets are vital for health and must be factored into the revised wage determination.
Beyond food, the formula fails to accommodate several non-food essentials. Presently, it only considers clothing and stitching expenses but ignores critical items such as bed sheets, pillow covers, socks, sweaters, toothpaste, shaving cream, utensils, and stoves etc. In today’s digital age, electronic devices such as mobile phones, computers laptops and internet services have become necessities for education, communication, and employment, yet they remain unaccounted for in the minimum wage calculation. Other daily necessities, including cleaning supplies like detergent, soaps, dishwashing liquid, feminine hygiene products and such other basic home maintenance items also need to be factored into the revised wage determination process. The need for reliable public or private transport expenses should also be taken into account, as daily commuting is an unavoidable expense for most employees.
Prior to the implementation of the 7th CPC, the Staff Side had demanded a minimum wage of Rs.26,000, which was ultimately curtailed to Rs.18,000. This figure remains insufficient given the ever-rising cost of living, inflation, and increased financial responsibilities of an average Indian worker. The proposed modification of the Dr. Aykrod Formula to five CUs and the inclusion of essential commodities and technological necessities would pave the way for a dignified living wage, not just a subsistence wage. The rising cost of education, including tuition fees, books, and online learning resources, further highlights the need for a comprehensive wage revision. With evolving lifestyle requirements, an updated formula must account for childcare expenses, elderly care, and the overall well-being of the family.
The Government must recognize the necessity of modifying the Dr. Aykrod Formula and direct the 8th CPC to not only determine a minimum wage but a decent living wage that accurately reflects modern economic and social realities. The inclusion of dependent parents as part of the Consumption Units and the revision of essential commodities considered for wage determination is critical for ensuring financial security and a dignified standard of living for millions of Indian families. Ensuring that the formula reflects the costs of a modern household, including elderly support and digital accessibility, is crucial in this era of rapid technological and social transformation. Without such reforms, millions of wage earners will continue to struggle to meet their family’s basic needs, leading to economic distress and social instability.
The time for reform is now. The Government, policymakers, and labour representatives must work together to implement these much-needed modifications to safeguard the well-being of employees and their families. Only by ensuring a fair and adequate wage structure can we truly uphold the principles of social justice and economic equity in India. Addressing the financial needs of the entire family, including elderly parents, and ensuring that wages are reflective of contemporary living conditions, will create a more stable and prosperous society for all.
(The author is a Service Union Representative and a Columnist. Mobile: 9437022669, eMail: samalbruhaspati@gmail.com)
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