The DA Revision Holds Exceptional Importance  in Determining the New Minimum Pay Structure under the 8th Pay Commission

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The government has officially clarified that there is no proposal to merge Dearness Allowance (DA) with Basic Pay under the upcoming 8th Pay Commission. This statement puts an end to recent speculation circulating among central government employees. The salary structure will continue under the existing framework, with DA revisions occurring periodically based on inflation. 

The clarification comes days after the government issued the Terms of Reference (ToR) for the 8th Central Pay Commission

Govt Clarifies DA-Basic Pay Merge Rumours 

Minister of State for Finance Pankaj Chaudhary said in a written response to the Lok Sabha on Monday (December 1) at the start of the Winter Session: 

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“No proposal regarding the merger of the existing dearness allowance with the basic pay is under consideration with the government at present.” 

"In order to adjust the cost of living and to protect Basic Pay/Pension from erosion in real value on account of inflation, the rates of DA/DR are revised periodically every 6 months based on All lndia Consumer Price lndex for lndustrial Workers (AlCPl-lW) released by Labour Bureau, Ministry of Labour and Employment," the reply further read.

Demand from Employee Unions

Several employee unions have urged the Centre to merge 50 per cent of the DA with basic pay. Employee groups have been advocating for an early DA-basic pay merger with the 8th Pay Commission expected only after 2027. This would increase the basic salary and result in future DAs being calculated on the revised amount.

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More about the 8th Pay Commission

The Union Cabinet on October 28 approved the Terms of Reference (ToR) of the 8th Pay Commission, which will revise the salaries of nearly 50 lakh central government employees. Former Supreme Court judge Ranjana Prakash Desai will be heading the Commission as the chairperson.

“Eighth Pay panel will submit recommendations within 18 months, and it is likely to come into effect from January 1, 2026,” I&B minister Ashwini Vaishnaw said at a Cabinet briefing.

The government announced the formation of the 8th Central Pay Commission in January 2025 to examine and recommend changes in the salaries and other benefits of central government employees.

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Why are Pensioners Not Satisfied?

The new ToR does not mention pensioners like the 7th Pay Commission. Unions argue that this weakens the scope for recommending pension revisions and ignores the needs of retired employees.

The notification also does not mention when the new pay structure will be implemented. This has led to uncertainty among employees preparing for retirement or financial planning.

The Central Pay Commissions are constituted periodically to go into various issues of emoluments structure, retirement benefits, and other service conditions of central government employees and to make recommendations on the changes required.

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The recommendations of the pay commissions are usually implemented after a gap of every ten years.