DA Hike- Is 74% DA Hike waiting for central employees? Take a look

DA Hike: Another major news is waiting for crores of central government employees. Although the 8th Pay Commission is expected to be implemented from January 1, 2026, for approximately 11.9 million central government employees and pensioners, it may take approximately 18 months for the Commission to submit its recommendations. During this time, employees will continue to receive their salaries and DA under the 7th Pay Commission. Learn about the new proposal from employee organizations on the DA merger, a major demand placed before the government.

Currently, the DA is 58 percent and is scheduled to increase further from January 2026. If the implementation of the new pay commission is delayed, the DA could reach 74 percent by 2027–28. Employee organizations have suggested merging 50 percent of the DA into the basic salary and continuing the remaining DA to mitigate the impact of inflation. The decision will now depend on the government’s stance.

Based on past experience, employees receive salaries under the current Pay Commission until the new Pay Commission is implemented. When the Commission’s recommendations are implemented, arrears are paid for the entire intervening period. This includes increased basic pay, allowances, and retirement benefits. This arrears are determined based on the new fitment factor, which means employees can expect to receive a large lump sum.

Concerns about DA are heightened because, upon implementation of the new Pay Commission, existing DA is merged into basic pay, and DA calculations begin from zero. Currently, DA is 58 percent effective July 1, 2025, and the next increase is scheduled for January 1, 2026. Based on current trends, if the 8th Pay Commission is implemented by 2027–28, DA could reach 74 percent.

Meanwhile, employee organizations have put forward an alternative proposal to the government. Manjeet Singh Patel, president of the All India NPS Employees Federation, says that if DA reaches 74 percent, instead of eliminating the entire DA, the government should merge 50 percent of the DA into the basic salary and continue the remaining 24 percent. This will reduce the sudden impact on employees’ incomes amid rising inflation.

Although the government approved the 8th Pay Commission’s Terms of Reference (ToR) in November 2025, it is expected to take approximately 18 months for the Commission to prepare its recommendations. Employee organizations have also demanded a fitment factor of 2.64 and an increase in the family unit from three to five when determining the minimum wage. All eyes are now on whether the government follows the traditional formula or adopts a new approach to provide relief to employees.