- By Yashashvi Tak
- Wed, 03 Dec 2025 11:41 AM (IST)
- Source:JND
The Central Government has stated that it is not considering any plan to merge the Dearness Allowance (DA) with the basic pay of central government employees. This was clarified in response to a Lok Sabha query, following the issuance of the Terms of Reference (ToR) for the 8th Central Pay Commission.
In a written reply on Monday, Minister of State for Finance Pankaj Chaudhary said, “No proposal regarding merger of the existing Dearness Allowance with the Basic Pay is under consideration with the Government at present.”
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"ln 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 All lndia Consumer Price lndex for lndustrial Workers (AlCPl-lW) released by Labour Bureau, Ministry of Labour and Employment," the reply further read.
On October 28, the Union Cabinet approved the Terms of Reference (ToR) for the 8th Pay Commission, tasked with reviewing and updating the salaries of nearly 50 lakh central government employees. The commission will be led by former Supreme Court judge Ranjana Prakash Desai.
The clarification comes amid growing demands from employee unions seeking an immediate merger of 50 percent DA with basic pay to offset rising inflation. Some unions have urged the Centre to implement this merger ahead of the 8th Pay Commission, expected only after 2027, which would increase basic salaries and allow future DAs to be calculated on the revised amount.
Earlier, I&B Minister Ashwini Vaishnaw said at a Cabinet briefing that the 8th Pay Commission will submit its recommendations within 18 months, likely taking effect from January 1, 2026.
About The 8th Pay Commission:
The commission will review and establish new pay structures and post-retirement benefits for central government employees and pensioners. Its comprehensive assessment is expected to take 12-18 months, covering salaries for around 50 lakh employees and pensions for nearly 65 lakh retirees. Interim reports will be submitted as finalised, with revised salaries and pensions expected to take effect from January 1, 2026, boosting take-home pay and pension payouts.