8th Pay Commission Update, Government Confirms No DA Merge with Basic Pay

The Ministry of Finance has clarified that there is no current proposal to merge the existing Dearness Allowance (DA), which is currently at 58 per cent, with the basic pay of central government employees and pensioners. This is the first major clarification since the constitution of the 8th Central Pay Commission (8th CPC).

On December 1, 2025, The statement was made, and in its response, Minister of State for Finance Pankaj Chaudharya had asked a question in the Lok Sabha about whether the government is planning to merge DA (and DA/DR for pensioners) with basic pay, given the recent jump in DA beyond 50 per cent and rising inflation. As per official records, the government also confirmed that the 8th CPC has been formally notified via a resolution dated November 3, 2025.

The ministry replied, DA/DR continues to be revised at six-month intervals, based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). The government says that this mechanism focuses on protecting the real value of basic pay and pensions against inflation and remains unchanged for now.

According to reports from financial and news sources, since January 2024, the demand for merging DA with basic pay had gained momentum when DA crossed the 50 per cent mark. Many employee groups and pensioner associations argued that such a merger would offer relief amid rising prices and ensure that future allowances and pensions are calculated on a higher base.

However, the government has given clarity, at least for now, that the existing pay structure remains intact. The 8th Pay Commission’s role now would be to reconsider pay scales, allowances, and service conditions, but any change to DA-basic pay merger is not part of current deliberations, as confirmed by official government communication.

For employees and pensioners, this means that while periodic DA hikes will continue as before, the base pay will not be restructured just yet. Until the commission tables its recommendations and the government accepts them, DA will remain separate, ensuring that inflation relief continues through periodic DA/DR increases rather than base pay changes.