Bhubaneswar/New Delhi, Dec 2: The central government has clarified that it is not considering any proposal to merge the existing dearness allowance (DA) with the basic pay of central government employees.

The statement was made in Parliament on Monday, December 1, as the Winter Session commenced, following queries about the constitution of the 8th Central Pay Commission.

Minister of State for Finance Pankaj Chaudhary, in a written reply to the Lok Sabha, said: “No proposal regarding merger of the existing DA with the basic pay is under consideration with the government at present.”

Also read: Declining Sex Ratio in Odisha Linked to Misuse of Abortion Drugs, Illegal MTP Kit Sales

The clarification comes just days after the Union Cabinet approved the Terms of Reference (ToR) for the 8th Pay Commission, which will review and recommend changes in the salaries and benefits of nearly 50 lakh central government employees.

Government’s Stand on DA

The minister explained that DA and DR (Dearness Relief for pensioners) are revised every six months to offset inflation and protect the real value of basic pay and pensions. The revisions are based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), released periodically by the Labour Bureau under the Ministry of Labour and Employment.

Also read: Odisha Forest and Environment Minister Highlights Sea Erosion, River Pollution

Despite this mechanism, several employee unions have recently demanded that 50 per cent of DA be merged with basic pay immediately. They argue that such a move would raise the basic salary and ensure that future DA increments are calculated on the revised amount. With the 8th Pay Commission expected to take effect only from January 1, 2026, unions have been pressing for an interim measure to ease financial pressures.

8th Pay Commission Timeline

The government had announced the formation of the 8th Central Pay Commission in January 2025. On October 28, the Union Cabinet approved its ToR, setting the stage for a comprehensive review of pay structures, retirement benefits, and service conditions.

Former Supreme Court judge Ranjana Prakash Desai has been appointed as chairperson of the Commission. The panel is expected to submit its recommendations within 18 months, with implementation likely from January 2026.

Historically, pay commissions are constituted every 10 years to examine emoluments and recommend changes. The 8th Pay Commission continues this tradition, aiming to balance employee welfare with fiscal responsibility.

Key Points from the Clarification

• No merger of DA with basic pay is under consideration.
• DA/DR rates will continue to be revised every six months based on inflation indices.
• The 8th Pay Commission will submit recommendations within 18 months, effective January 2026.

The government, through the clarification, underscores its reliance on established mechanisms for wage adjustments while deferring any immediate structural changes until the Pay Commission completes its review.