The Central Government employees as well as the pensioners, who are very much concerned about the 8th CPC, and the possible merger of DA with the basic salary, have got a clear reply from the Finance Ministry.
By making a statement in the Lok Sabha on the 1st of December 2025, the government further mentioned that no proposal for the immediate merger of the existing Dearness Allowance with the Basic Pay is being considered at present.
This declaration makes it clear that the employees’ unions have been looking for a merger once the DA threshold goes up to 50% arguing that it will be a better way to protect their wages and pensions against inflation which is a slowly and steadily proceeding factor.
Current Dearness Allowance Policy
The government has reiterated that the current policy framework for the Dearness Allowance and Dearness Relief (DR) laws is very strong and functional. The rates of DA and DR undergo changes every six months, usually coming into effect on January 1 and July 1.
The changes are made using data that the Labour Bureau releases, in particular, the All India Consumer Price Index for Industrial Workers (AICPI-IW). The main aim of this semi-annual change is to make sure that the employees’ basic pay does not lose its real value because of inflation, as it is an adjustment for the cost of living. The ministry has confirmed that this system is still the main way to fight inflation.
8th CPC Constitution Details
Although a merger of DA is not an option at the moment, the government has still the power to create the 8th Central Pay Commission officially through a Resolution that is dated November 3, 2025. The commission’s Terms of Reference (ToR) have been sanctioned and this has paved the way for a thorough examination of the salary, allowances, and working conditions of Central Government employees and pensioners.
The commission is expected to present its advice in 18 months. Provided that merging is not a measure of immediate relief the final recommendations of the 8th CPC which are to be executed sometime around January 1, 2026, are likely to contain a revised pay matrix where the accumulated Dearness Allowance is normally added into the new basic pay structure, basically setting the DA to nil. This is the usual procedure in the new pay commission cycle.
Also Read: 8th Pay Commission Update: Government Employees Might Have To Wait Until 2028
A recent media graduate, Bhumi Vashisht is currently making a significant contribution as a committed content writer. She brings new ideas to the media sector and is an expert at creating strategic content and captivating tales, having working in the field from past four months.
