DA: Central government employees are eagerly discussing the Eighth Pay Commission, closely following all updates related to it and eagerly anticipating its recommendations. The commission is anticipated to present its recommendations to the government by the first half of 2027. Prior to this, various employee groups have submitted their list of requests to the Pay Commission.
Request for reassessment of existing index
The All India Defence Employees Federation (AIDEF) has put forth a demand concerning the calculation of dearness allowance (DA) and dearness relief (DR) for central employees. AIDEF suggests that the current index used for calculating DA and DR needs to be reevaluated. The current method fails to accurately represent the true inflation and increasing cost of living, causing hardship for employees and retirees. Presently, dearness allowance is computed based on a 12-month average of the All India Consumer Price Index for Industrial Workers (AICPI-IW).
The AICPI-IW index serves as the foundation for granting inflation allowances to central government employees and retirees. Its main objective is to offer necessary relief to employees and retirees from escalating expenses, daily inflation, and other relevant factors. As per the argument, the index is struggling to effectively and equitably capture the current inflation scenario.
Discussion on the issue of inflation
In their second supplementary submission to the 8th Pay Commission, AIDEF pointed out that the revised CPI basket introduced in 2022-23 does not accurately reflect the changes and price hikes of food items and seasonal agricultural products. The Federation highlighted that food items now make up only 36.75% of the total index. It is possible that an employee’s personal inflation rate might be higher than what is indicated in the revised index, necessitating a complete restructuring of this index.
AIDEF also emphasized that the situation is more dire for retirees. Currently, the dearness allowance for central government employees stands at 60 percent. Likewise, pensioners receive a dearness relief (DR) of 60 percent. The latest increase in this allowance for central government employees and pensioners occurred in April 2026, with a 2 percent rise implemented during that month.