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'8th Pay Commission Notified, No Plan To Merge Existing DA With Basic Pay': MoS Finance
'8th Pay Commission Notified, No Plan To Merge Existing DA With Basic Pay': MoS Finance
8th Pay Commission Updates: Union Minister of State for Finance Pankaj Chaudhary on Monday said the central government has notified the constitution of the 8th Central Pay Commission, and there is no proposal as of now to merge the existing dearness allowance (DA) or dearness relief (DR) with the basic pay.
“No proposal regarding merger of the existing dearness allowance with the basic pay is under consideration with the government at present. 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 six months on the basis of the All India Consumer Price Index for Industrial Workers (AICPI-IW) released by Labour Bureau, Ministry of Labour and Employment," Chaudhary said in response to a query in the Lok Sabha.
He said the government has notified Resolution dated November 3, 2025, for the constitution of the Eighth Central Pay Commission. A copy of the Notification is enclosed at Annexure-1.
Currently, both DA and DR stand at 55% of the basic pay or pension, respectively. Last month, the government had hiked the DA/ DR by 3% to 55% ahead of Diwali.
Dearness allowance (DA) is for central government employees, while dearness allowance (DR) is given to pensioners. The 8th Pay Commission's decision will directly impact more than 5 million employees and over 6.5 million pensioners.
The 8th Pay Commission was announced by the central government in January this year. The move comes even as the current 7th Pay Commission is ending its 10-year tenure this year.
Headed by Justice (Retd.) Ranjana Desai, the 8th Pay Commission is expected to submit the recommendations on salaries, basic pay and fitment factor, within 18 months.
The 7th Pay Commission came into effect on January 1, 2016, and pay commissions typically operate on a 10-year cycle. That makes 2026 the natural year for revising pay structures. However, media reports suggest that delays in appointments, ToR clarification, and the overall process could push the implementation timeline by at least two years.
The Terms of Reference (ToR), its members and chairman were announced in October 2025, nine months after the announcement of the new pay panel. However, several employee federations claimed that the ToR had excluded around 69 lakh pensioners from the commission's purview and did not mention the implementation date of the new pay scales. Unions argue that this omission is unprecedented, as earlier commissions had clearly defined these details upfront. They have urged the government to amend the ToR and incorporate their suggestions, but so far, the Centre has remained silent.
The staff side of National Council-Joint Consultative Machinery (NC-JCM), earlier, told NDTV Profit that it is expected that 8th pay commission to recommend a fitment factor that could be similar to 7th pay panel.
Ambit report in July suggested that the fitment factor is expected to be fixed in the range of 1.83 to 2.46.
“As per back-of-the-envelope calculations, depending on the salary growth seen over different Pay Commissions, the range of fitment factors that the government could be looking at lies between 1.83 and 2.46," financial services firm Ambit Capital said in a report.
8th Pay Commission Salary Calculator: How Much Salary Will Be Increased?
Going by Ambit Capital's expectation of a fitment factor between 1.83 and 2.46, the minimum salary of central government employees may be fixed between Rs 32,940 and Rs 44,280, compared with the current Rs 18,000 a month.
A fitment factor of 1.83 would raise the basic salary from Rs 18,000 to around Rs 32,940, while a factor of 2.46 would raise it to Rs 44,280.
The final increase in salaries will depend on the fitment factor decided. The 8th Pay Commission will revise salaries, pensions, and allowances, directly benefiting over 50 lakh central government employees and over 65 lakh pensioners.
Ambit Capital in the report estimates that the 8th Pay Commission may result in a minimum 14% real hike in pay (including Basic Pay+DA) and a maximum of 54%. However, the maximum 54% hike in real pay is highly unlikely as the government could face significant financial challenges in implementing the same.
“While the government might consider a higher increase, potentially using it as a consumption stimulus, expecting a substantial 54% jump (as seen during the 6th Pay Commission) seems unlikely, since it could face significant financing challenges," the report said.
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To help employees estimate what they might earn, here are examples of revised salaries at different fitment factors 1.92 and 2.57 across select grade pays (1900, 2400, 4600, 7600, 8900). These examples also include allowances such as House Rent Allowance (HRA), Transport Allowance (TA), National Pension System (NPS), and Central Government Health Scheme (CGHS).
It is important to note that HRA is taken as 24 per cent of basic salary (for X-class cities), TA varies from Rs 3,600 to Rs 7,200 depending on the level, NPS is 10 per cent of basic, and CGHS is kept at current rates, according to india.com.
Source: News18
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