8th Pay Commission: Government Rejects Employees’ Demand for DA Merger

New Delhi: The central government has formally constituted the 8th Pay Commission. Following this, central employee organizations have renewed their demand to merge the Dearness Allowance (DA) with the basic salary. Currently, the DA stands at 58%, having crossed the 50% mark as early as January 2024.

Several employee unions have urged that the DA be merged into the basic pay, a move that would increase the overall salary structure. However, the Ministry of Finance has clarified that there is no proposal under consideration for such a merger. Responding to a question from MP Anand Bhadoria in the Lok Sabha, Minister of State for Finance, Pankaj Chaudhary, stated that the government has no plan to merge the DA with basic pay at present. The DA continues to be revised twice a year.

Understanding the 7th Pay Commission Salary Structure
Under the 7th Pay Commission, the minimum basic pay is ₹18,000 (Level 1), while the maximum is ₹2,50,000 (Level 18). All allowances, including DA and House Rent Allowance (HRA), are calculated based on basic pay. Merging DA with basic pay would increase the notional basic salary, which would, in turn, impact the calculation of future increments and allowances.

Impact of DA Merger
Manjeet Singh Patel, National President of the All India NPS Employees Federation, explains: “If a government employee had a basic salary of ₹76,500 (grade pay ₹4,800) in January 2024, with 50% DA, the revised basic pay after merging DA would have been ₹1,14,750. With a 3% increase in January 2025, the total salary would rise to ₹1,18,192. Adding 27% HRA and ₹5,400 Transport Allowance, the total salary would be ₹1,64,959. Currently, without the DA merger, the same employee receives ₹1,53,832, resulting in a difference of ₹11,127 or 7.23%. If the 8th Pay Commission is implemented after two years, the difference could exceed 15%.”

While the DA merger remains a key demand of central employees, the government has made it clear that there are no immediate plans to implement it.