In a recent clarification in Parliament, the Ministry of Finance has said it has no proposal under consideration to merge DA or DR with the basic pay or pension of central government employees and pensioners.
🔹 What led to this demand
- The DA for central government employees crossed the 50% threshold in January 2024, which revived long-standing demands by various employees’ unions for merging DA with basic pay.
- Recently in November-2025, the government issued the Terms of Reference (ToR) for the 8th Pay Commission — reviving expectations that a merger might be on the cards.
🔹 Government’s official stance as of December 2025
- In response to a question by a Member of Parliament, the Finance Ministry’s Minister of State (MoS) clarified that no plan exists to merge (or consolidate) the existing DA/DR with basic pay or pension.
- The Ministry emphasized that DA/DR will continue to be revised every six months — based on the official inflation index (All-India Consumer Price Index for Industrial Workers, AICPI-IW) — to protect employees’ and pensioners’ incomes from erosion due to inflation.
🔹 What the 8th Pay Commission will cover (for now)
- The 8th Pay Commission — formally notified on 03 November 2025 — will review pay structures, allowances (including DA/DR), pensions, and service conditions for central government employees and pensioners.
- Importantly, the government has clarified that pension revision (for retirees) is part of the Commission’s remit — a relief for many pensioner-groups who had earlier feared that pension review might be excluded.
🔹 What this means right now (for employees & pensioners)
- Despite rising inflation and a high DA (currently at 58%), there will be no immediate merger of DA/DR with basic pay/pension — so total pay/pension structure remains unchanged for now.
- Employees and pensioners will continue to receive DA/DR as separate allowances, revised semi-annually.
- The 8th Pay Commission may, in its final recommendations, suggest changes in pay scales, fitment, pension revision, allowances — but any structural change (like DA-basic pay merger) will depend on its report and subsequent government decision.