8th Pay Commission: Finance Ministry Clarifies on DA, DR Merger With Basic Pay — What Central Government Employees Must Know

The discussion around the 8th Pay Commission has been gaining momentum across India, especially among central government employees and pensioners. Recently, a major clarification came from the Ministry of Finance regarding the speculated proposal to merge the existing DA (Dearness Allowance) and DR (Dearness Relief) with basic pay.

This clarification finally addressed the confusion that has been circulating among employee groups, social media platforms, and news outlets.

What Was the Rumour?

Several reports suggested that before announcing the 8th Pay Commission, the government was planning to merge the existing DA/DR with basic salary, potentially resulting in higher take-home pay and pension benefits.

Since DA and DR have crossed the 50% mark, many employee unions believed it would automatically trigger a merger — just like it happened during the implementation of earlier Pay Commissions.

What Did the Finance Ministry Say?

The Finance Ministry has officially clarified that there is no proposal under consideration to merge DA and DR with the basic pay at this stage.

This statement puts a pause on the assumptions that the salary structure may change before the rollout of the 8th Pay Commission.

However, the clarification has not stopped speculation — especially with Lok Sabha elections approaching and increasing demands from employee groups.

What Does This Mean for Employees?

While the DA and DR merger is not happening right now, the demand for:

Higher basic pay
Better fitment factor
Increased retirement benefits

continues to grow.

If the 8th Pay Commission is approved and implemented — expected around January 2026 — central employees may see a significant revision in:

Basic Pay
Allowances
Pension Framework

Employee bodies are now pushing for a revised fitment factor of 3.68x, which could significantly boost salaries under the next pay scale.

Why Is This Topic Important?

More than 48 lakh government employees and 69 lakh pensioners are waiting for updates regarding:

Salary revision
Allowance restructuring
Retirement benefits

The merger of DA/DR with basic pay would have accelerated the increments, impacting:

✔️ PF contributions
✔️ Gratuity
✔️ Pension amount
✔️ Annual increment calculations

So, even though the government has clarified its stance for now, the demand is unlikely to fade.

What’s Next?

Employee unions are expected to continue discussions with:

Central Pay Commission
Ministry of Finance
Cabinet Committee

as they seek a favorable decision before the final proposal of the 8th Pay Commission is drafted.

Final Verdict

For now, the government has ruled out the merger of DA/DR with basic pay, but all eyes remain on the progress toward the 8th Pay Commission. Employees can expect more clarity in the coming months.