8th Pay Commission: Big news for central employees. The Finance Ministry has issued a clarification stating that there is no proposal under consideration to merge DA (Dearness Allowance) and DR (Dearness Relief) into basic pay. The ministry’s clarification addresses a long-standing demand from central government employees and pensioners.
This statement comes at a time when discussions about the 8th Pay Commission are in full swing, and employees are hoping for a salary increase. A ministry official stated that merging DA and DR into basic pay would significantly change the salary structure. However, no decision has been made yet.
This clarification was issued following rumors circulating on social media that a merger could be announced soon. However, the timeline for the implementation of the Eighth Pay Commission has not yet been announced. Speculation is rife that it could be implemented as early as January 1, 2026. However, its full implementation may take until 2028.
This is why many people have a question in their mind whether the government will continue to revise the Dearness Allowance (DA) till the implementation of the next Pay Commission, or the employees will have to wait till the next Pay Commission for the salary hike.
When did the demand for DA-DR merger begin?
Central employees’ organizations have raised the demand for a DA-DR merger since the 7th Pay Commission in 2016. They argue that rising inflation increases the burden of DA, and integrating it into basic pay will benefit pensions and other allowances. A staff representative said, “This merger would provide relief to employees, but the government has not taken any concrete steps.”
Financial experts believe the merger will place additional burden on the government. One analyst stated, “The DA currently reaches 58%. Merging it will increase basic pay and could increase spending by more than 0.5% of GDP.” However, the ministry stated that the DA will be increased periodically to provide relief from inflation.
Finance Ministry’s statement puts an end to rumours
A statement issued by the ministry clearly states that the government has no proposal to merge DA and DR into basic pay. This statement was issued amid reports of fake news circulating on social media. The official further stated that employees should avoid misleading news. “We conduct DA reviews on a timely basis,” the official added.
Similar rumors surfaced last year as well, but the ministry dismissed them each time. A senior official explained that the 7th Pay Commission had a fitment factor of 2.57, which was implemented without the DA merger. Now, the process of forming a committee for the 8th Pay Commission is underway, but there has been no discussion on merger.
The 8th Pay Commission is expected to be implemented from January 1, 2026, benefiting over 5 million central employees and 6.5 million pensioners. Employee unions say the fitment factor could be as high as 2.46, which would increase average salaries by 30-40%. However, there is disappointment over the lack of DA merger.
A union leader said that a merger would provide significant relief to pensioners. The government should reconsider this. Experts predict that the formation of the commission could be announced in Budget 2025-26. Currently, the next DA increase is scheduled for March 2026.
Impact on employees, what to plan
This clarification will force employees to rely solely on DA. With inflation at 5.49%, the next increase could be 3%. Financial planners advise focusing on savings and increasing investments in mutual funds. One expert said that salaries will remain stable, but create side income sources to combat inflation. Overall, this decision is a setback for employees, but there is hope for significant relief from the 8th Commission. The government has assured that all benefits will be provided on time.