Sunita Somvanshi
Employee unions want Dearness Allowance merged with basic pay ahead of the 8th Pay Commission’s final recommendations. The government’s stated position is on record in Parliament. Here is what is confirmed, what employees are asking for and why the two positions differ.
The 8th Pay Commission was constituted by a government resolution dated November 3, 2025, and is chaired by Justice Ranjana Prakash Desai. On December 1, 2025, Minister of State for Finance Pankaj Chaudhary gave a written answer in the Lok Sabha to Unstarred Question No. 212, stating: “No proposal regarding merger of the existing Dearness Allowance with the Basic Pay is under consideration with the Government at present.” The same answer confirmed that the Commission has been mandated to submit its recommendations within 18 months of its constitution—a timeline that runs to approximately May 2027. The current DA rate is 60% of basic pay, effective from January 1, 2026. No official reversal of the December 2025 Parliament position has been reported as of October 2026. The 8th Pay Commission’s own verified social media account has flagged as fake a viral claim that a 50% DA merger with effect from January 1, 2026 had been approved, stating that no such official order has been issued by the Government of India. The Commission is in its consultation phase and has not published recommendations.
For employees expecting a DA merger as an immediate interim benefit, the government’s Parliament answer remains the most authoritative signal on record. The merger is a formal demand submitted before the Commission, not a decision pending Cabinet clearance. Until the 8th CPC recommends a merger and the government accepts it, DA is not incorporated into basic pay. The fitment-factor debate runs in parallel, as seen in the NC-JCM’s proposed 3.83 fitment factor submitted during the same consultation process.
Why a DA Merger Changes More Than Just the DA Number
The reason employee unions push for a DA merger goes beyond the percentage itself. Basic pay is the base from which several key entitlements are calculated—including House Rent Allowance, gratuity and leave encashment, though the specific formula for each varies under the applicable service and pension rules; some calculations include DA and some do not. When DA is merged with basic pay, the base figure rises and linked benefits may increase depending on the applicable formula. The compounding effect across increments, pension and gratuity is why employee groups argue a merger gives more durable long-term relief than a standalone DA revision, a point also covered in the broader 8th Pay Commission salary hike overview.
The government’s stated position is that DA mergers carry a significant fiscal cost and that the 8th CPC is the proper forum for changes to pay structure. The Commission is expected to submit its recommendations by approximately May 2027, after which the government will decide what to accept and when to implement it; implementation of revised pay scales would follow a separate Cabinet decision, as it has in previous Pay Commissions.
Has the government agreed to merge DA with basic pay? No. The December 1, 2025 Parliament answer, confirmed by the Minister of State for Finance, states no such proposal is under consideration. The 8th Pay Commission’s own account has flagged the claim of a January 2026 DA merger as fake. No DA merger takes effect unless the Commission recommends it and the Cabinet accepts it. Check PIB and the 8th CPC’s official website at 8cpc.gov.in for updates as the Commission’s work develops.
