Synopsis: The Finance Ministry has clarified that there is no proposal to merge DA and DR into basic pay. Meanwhile, discussions on the 8th Pay Commission continue, and it is speculated that the new pay structure may be implemented from January 1, 2026.
8th Pay Commission: Finance Ministry Issues Clarification on DA-DR Merger
The Finance Ministry has officially stated that there is no proposal under consideration to merge Dearness Allowance (DA) and Dearness Relief (DR) into basic pay. This clarification comes in response to long-standing demands raised by central government employees and pensioners.
The clarification comes at a time when discussions about the 8th Pay Commission are gaining momentum. Many employees were expecting some major changes in their salary structure, leading to widespread speculation on social media. However, the ministry has confirmed that no decision has been taken regarding the merger.
Rumors and the Implementation Timeline
Social media had recently been filled with rumors that the government would soon announce a merger of DA-DR with basic pay. The Finance Ministry has now dismissed these claims.
While the official timeline for the 8th Pay Commission has not been announced, it is widely speculated that it could be implemented from January 1, 2026. However, experts believe that the full impact of the pay commission may take until 2028 to roll out completely.
This has raised concerns among employees who are wondering whether the DA hikes will continue until the new pay commission is in place.
When Did the Demand for DA-DR Merger Begin?
The demand for merging DA and DR into basic pay dates back to the 7th Pay Commission in 2016. Employee unions argue that with rising inflation, merging DA with basic pay would benefit employees as well as pensioners since allowances and pensions are calculated based on basic pay.
A staff representative noted, “This merger would give major relief to employees, but no concrete steps have been taken by the government so far.”
Financial experts, however, believe that the merger would significantly increase the government’s financial burden. With DA currently at 58%, merging it with basic pay could increase expenditure by more than 0.5% of GDP.
The Ministry clarified that DA will continue to be increased regularly to provide relief against inflation.
Government’s Stand: Ending Rumors
The Finance Ministry has clearly stated that there is no proposal to merge DA and DR with basic pay. This clarification was issued following widespread misinformation on social media.
A senior official pointed out that even during the 7th Pay Commission, the fitment factor of 2.57 was implemented without merging DA. Similarly, for the 8th Pay Commission, the process of forming a committee is underway, but no discussion has taken place regarding DA-DR merger.
What to Expect from the 8th Pay Commission?
The 8th Pay Commission is expected to benefit over 5 million central employees and 6.5 million pensioners. Although there is disappointment over the DA merger not happening, expectations remain high for salary hikes.
Employee unions claim that the fitment factor could be around 2.46, potentially increasing salaries by 30–40%. However, the next official update is expected once the commission is formally announced, possibly in the Budget 2025–26.
Meanwhile, the next DA hike is scheduled for March 2026.
Impact on Employees: What Should You Plan?
Since the DA-DR merger is not happening anytime soon, employees will continue to rely solely on DA hikes. With an inflation rate of 5.49%, the next DA increase is expected to be around 3%.
Financial planners suggest:
- Strengthen savings to handle inflation
- Increase investments in mutual funds
- Create side income sources
- Avoid relying solely on salary increments
Although the clarification may disappoint employees hoping for immediate relief, the upcoming 8th Pay Commission provides hope for significant salary improvements.
📌 Key Takeaway
The Finance Ministry has denied any move to merge DA and DR with basic pay. While this may disappoint employees, the 8th Pay Commission—expected to be implemented from January 1, 2026—is likely to bring substantial financial relief and salary revisions.
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