8th CPC Notified; No Proposal to Merge DA/DR with Basic Pay for Central Govt Employees
On Monday, Pankaj Chaudhary, Union Minister of State (Finance) stated that central government would notify the establishment of the eighth Central Pay Commission (CPC) and there is no proposal at present for merging the existing Dearness Allowance (DA) or Dearness Relief (DR) with the basic pay of central government employees.
Aadrika Tayal 
New Delhi (India) December 2: In response to a question raised in Lok Sabha, the central government clarified that it is not examining the possibility of combining any component of DA with basic salary for central government employees. The government’s approval of the Terms of Reference (ToR) for the 8th CPC were sent on October 28.
No Current Proposal for DA or DR Merger with Basic Pay
The Government of India has clarified to the Parliament, responding to an inquiry about the establishment of an 8th Pay Commission, that they are not currently working on any proposals to integrate any aspect of the Dearness Allowance (DA) with the Basic Pay of Central Government employees.
Minister of State for Finance Pankaj Chaudhary said, "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 on the basis of the All-India Consumer Price Index for Industrial Workers (AICPI-IW) released by the Labour Bureau, Ministry of Labour and Employment.”
Employee Unions Request DA Merger Ahead of 8th CPC Implementation
Currently, both DA and DR stand at 55 percent of either the Basic Pay or Pension; last month, the Government increased the rates by three percent to reach this level prior to Diwali.
Dearness Allowances apply to Central Government Employees, while Dearness Relief applies to pensioners. The implementation of the 8th Pay Commission will affect over five million employees and more than six-and-a-half million pensioners nationwide.
Recently, an increasing number of Employee Unions have approached the Central Government, requesting the establishment of a merger between 50 percent of the DA with the Basic Pay. As the 8th Pay Commission will likely be implemented following 2027, the Employee Unions have petitioned for an expedited merger of the DA to the Basic Pay so that the revised Basic Salary can be taken into consideration when calculating future DA.
8th Pay Commission to Submit Recommendations Within 18 Months
The Minister of Information & Broadcasting Ashwini Vaishnaw announced that the 8th Pay Commission will complete its recommendations in 18 months and likely implement them from January 1, 2026, during his remarks at a Cabinet meeting.
Role and Importance of the Pay Commission
The Pay Commission is responsible for determining the pay levels and service conditions for employees working in the central government, and periodically reviewing what salaries and other allowances are appropriate for these workers as well as their pensions and all other aspects of their employee benefits package.
The recommendations provided by the Pay Commission ensure that all government employees receive adequate, equitable compensation; can retire with adequate security; and have parity across departments and roles in terms of compensation and benefits.
