A question is currently being widely discussed among central government employees and pensioners: Will the government merge the existing Dearness Allowance (DA) with the Basic Pay before the implementation of the 8th Pay Commission?
The reason for this question is clear. The term of the 7th Pay Commission ended on December 31, 2025, and the DA increase for January-June 2026 will be the first revision outside the purview of the 7th Pay Commission. While the 8th Pay Commission has begun its work, its implementation is expected to take a considerable amount of time.
Why the 8th Pay Commission will take time
Typically, a pay commission takes about 18 months to submit its report. After that, the process of reviewing the report, obtaining cabinet approval, and implementation can take at least another 6 months. Given the current situation, it is considered unlikely that the recommendations of the 8th Pay Commission will be implemented before the end of 2027.
Meanwhile, employee organizations have demanded that the government provide interim relief by merging the current 58% DA with the Basic Pay until the new pay structure is implemented.
Government’s clear response: No proposal to merge DA
However, the government’s stance on this demand is quite clear. In a written reply given in Parliament in December 2025, the government stated that:
There is no proposal under consideration to merge the existing Dearness Allowance with the Basic Pay.
The government maintains that the six-monthly revision of DA/DR, which is based on the AICPI-IW (inflation index), is sufficient to compensate for the loss due to inflation. Therefore, no structural changes are considered necessary at this time.
Why employee organizations want DA merged
Employee organizations have a different argument. They believe that:
Merging DA with the basic pay will increase the basic salary.
Along with this, HRA, TA, and other allowances will also automatically increase.
It will also directly benefit the calculation of pensions.
The current DA rate does not fully reflect the actual inflation.
This is why the unions have demanded its implementation as an interim relief.
Why did the 6th Pay Commission refuse to merge DA?
The debate over merging DA is not new. Going back, the 5th Pay Commission had recommended that whenever the inflation index increased by 50% from the base index, DA should be converted into Dearness Pay (DP). On this basis, 50% DA was merged with the basic pay from April 1, 2004.
However, the 6th Pay Commission disagreed with this approach. The commission stated that if DA is merged with the basic pay, then it becomes necessary to change the base of the price index as well. The new base index would be higher, resulting in a lower DA rate in the future.
The 6th Pay Commission also argued that in the new pay structure:
Increments are already being given as a percentage of pay and grade pay.
All allowances and benefits are revised periodically under an inflation-linked system.
Therefore, the commission clearly stated:
“The Commission is not recommending the merger of Dearness Allowance with Basic Pay at any stage.”
There was also deliberation on how often DA should be given.
Before the 6th Pay Commission, there was a demand to give DA three times a year. However, the commission did not accept this and said that:
DA will be given only twice a year—on January 1 and July 1.
This arrangement is administratively convenient.
100% inflation neutralization will be maintained at all levels.
What now?
Overall, the possibility of merging DA with basic pay in the current circumstances seems very low. The government’s stance is clear, and the thinking of the previous pay commissions has also been in the same direction. Until the recommendations of the 8th Pay Commission are implemented, employees and pensioners can only hope for relief through the half-yearly Dearness Allowance (DA) increases. While the unions are pressing their demands, the government does not currently appear to be in the mood for any interim changes.