In response to a query in the Lok Sabha, the Central government has informed that it is currently not working on any plan to merge any part of the DA (dearness allowance) with the basic pay of central government employees.
The development follows the government’s decision to issue the Terms of Reference (ToR) for the 8th Central Pay Commission.
On October 28, the Union Cabinet gave its approval to the Terms of Reference (ToR) of the 8th Pay Commission, which is aimed at revising the salaries of almost 50 lakh central government employees. The Commission will be headed by former Supreme Court judge Ranjana Prakash Desai.
No proposal regarding the merger
On the first day of the winter session, Minister of State for Finance Pankaj Chaudhary informed the lower house in a written response that said, “No proposal regarding the merger of the existing dearness allowance with the basic pay is under consideration with the government at present.”
The minister’s reply further reads, “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.”
In recent times, some employee unions have requested the Centre to consider merging 50 per cent of the DA with basic pay. As the 8th Pay Commission is likely to be rolled out only after 2027, employee groups have been urging for an early DA-basic pay merger, which would further translate into an increased basic salary, with future DAs being calculated on the revised amount.
Earlier, I&B Minister Ashwini Vaishnaw said at a Cabinet briefing that the Eighth Pay Panel will submit its recommendations within 18 months, and it is likely to take effect from January 1, 2026.