8th Pay Commission: The central government gave the green light to the Terms of Reference (ToR) for the 8th Pay Commission during a cabinet meeting led by Prime Minister Narendra Modi on October 28. The official notification followed on November 3. This marks the beginning of significant changes to salaries, pensions, and allowances.
However, a pressing question remains: what will happen to employees’ dearness allowance (DA) until the new pay commission is put into effect? This topic has sparked intense discussions. People are curious if the DA increase will halt from January 1, 2026, or if it will keep rising. Let’s break down the details.
How will DA increase until the 8th Pay Commission is implemented?
Until the recommendations of the 8th Pay Commission are put into action, DA will keep being calculated as a percentage of the basic pay, with adjustments made every January and July. Experts explain, “Until the 8th Pay Commission is in place, DA will be calculated as a percentage of basic pay. This percentage is updated twice a year, in January and July, depending on inflation and economic factors.”
What will happen to DA?
Once the new Pay Commission is in effect, the current DA will be integrated into the basic pay, leading to a new pay structure. Experts state, “As soon as the 8th Pay Commission is implemented, the existing DA will be combined with the basic pay, resulting in a new pay structure. This adjustment will affect salaries, allowances, and pensions.” According to experts, the current DA increase offers immediate relief, but the significant changes will come after the Pay Commission’s recommendations are enacted.
Why is DA so significant?
The government salary framework consists of basic pay, DA, HRA, TA, and various other allowances. Over the years, the proportion of basic pay in the overall salary has dropped from 65% to around 50%, while the portion of allowances has risen. DA plays a vital role for employees in managing inflation and preserving their purchasing power.
When was the last DA increase?
On October 1, the Cabinet sanctioned a 3% DA increase just before Diwali. This adjustment was influenced by the 7th Pay Commission.
Who stands to gain?
The Eighth Pay Commission along with the DA increase will benefit roughly 11.5 million employees and pensioners. This group includes 5 million central government employees, including those in defense, and 6.5 million pensioners, also including defense personnel.