8th Pay Commission: The Finance Ministry has issued a clarification stating that there is no proposal under consideration to merge DA (Dearness Allowance) and DR (Dearness Relief) into basic pay. The ministry issued this clarification in response to a long-standing demand from central employees and pensioners.
This statement comes at a time when discussions regarding the 8th Pay Commission are in full swing, and employees are hoping for a salary increase. A ministry official stated that merging DA and DR into basic pay would significantly alter the salary structure, but no decision has been made yet.
This clarification follows rumors circulating on social media suggesting a merger could be announced soon. However, the timeline for the implementation of the 8th Pay Commission has not yet been announced. It is speculated that it could be implemented from January 1, 2026, but its full implementation may take until 2028.
This is why many people have a question in their mind whether the government will continue to revise the Dearness Allowance (DA) till the implementation of the next Pay Commission, or the employees will have to wait till the next Pay Commission for the salary hike.
When did the demand for DA-DR merger begin?
Central employees’ organizations have raised the demand for DA-DR merger since the 7th Pay Commission in 2016. They argue that rising inflation increases the burden of DA, and merging it with basic pay will benefit pensions and other allowances. A staff representative said, “This merger will provide relief to employees, but no concrete steps have been taken by the government.”
Financial experts believe that the merger will put an additional burden on the government. One analyst said, “DA has currently reached 58%. Merging it will increase basic pay and could increase expenditure by more than 0.5% of GDP.” However, the ministry stated that DA will continue to be increased periodically to provide relief from inflation.
Finance Ministry’s statement, putting an end to rumors
The statement issued by the ministry clearly states that the government has no proposal to merge DA and DR with basic pay. This statement was issued amid widespread fake news on social media. The official further stated that employees should avoid misleading news. “We conduct DA reviews on a timely basis.”
Similar rumors surfaced last year as well, but the ministry dismissed them each time. A senior official stated that the 7th Pay Commission had a fitment factor of 2.57, which was implemented without the DA merger. The process of forming a committee for the 8th Pay Commission is now underway, but there has been no discussion on the merger.
What are the expectations from the 8th Pay Commission and when will it be implemented?
The 8th Pay Commission is expected to be implemented from January 1, 2026, benefiting over 5 million central employees and 6.5 million pensioners. Employee unions say the fitment factor could be up to 2.46, increasing the average salary by 30-40%. However, there is disappointment over the lack of a DA merger.
A union leader said that a merger would provide significant relief to pensioners. The government should reconsider this. Experts estimate that the formation of the commission may be announced in Budget 2025-26. Currently, the next DA hike is scheduled for March 2026.
Impact on Employees: What to Plan?
This clarification will force employees to rely solely on the DA. With an inflation rate of 5.49%, the next increase could be 3%. Financial planners advise focusing on savings and increasing investments in mutual funds. One expert said that salaries will remain stable, but create side income sources to combat inflation.
Overall, this decision is a setback for employees, but there is hope for significant relief from the 8th Commission. The government has assured that all benefits will be provided on time.
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