The central government has stated that there are no current plans to merge dearness allowance (DA) with the basic pay of central government employees. This confirmation was provided to Parliament on Monday, shortly after the release of the Terms of Reference (ToR) for the 8th Central Pay Commission.
In response to an inquiry in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary affirmed that there is no ongoing proposal to integrate any portion of the existing DA with the basic pay.
This announcement was made on December 1, coinciding with the commencement of the Winter Session of Parliament. In recent weeks, various employee unions had been urging the government to merge 50% of DA with basic pay, arguing that an early merger would enhance basic salaries and result in higher future DA calculations, particularly with the 8th Pay Commission not anticipated to revise pay scales until post-2027.
Employee unions advocating for the DA merger highlight the immediate relief it would bring amidst escalating inflation and living costs. While such mergers have been executed in past decades prior to new pay commission formations, the government has clarified that it is not considering this option at present.
The Union Cabinet had approved the Terms of Reference for the 8th Central Pay Commission on October 28. This Commission is tasked with reviewing the salaries, allowances, pension structures, and other service conditions affecting nearly 50 lakh central government employees.
Information and Broadcasting Minister Ashwini Vaishnaw indicated that the 8th Pay Commission is expected to present its recommendations within 18 months. If the timeline proceeds as planned, the revised pay structure might be implemented from January 1, 2026, following the Commission’s formation confirmation in January 2025.
Pay Commissions play a crucial role in determining the pay and service conditions of central government employees, ensuring fair compensation, enhancing retirement security, and maintaining uniformity across different departments and roles. The recent government statement underscores that any alterations to the DA basic pay arrangement will be contingent on the 8th Pay Commission’s recommendations, rather than an interim merger.