The Finance Ministry has clarified that there are no plans to merge 50% of the Dearness Allowance (DA) and Dearness Relief (DR) with the basic pay or pension of central government employees and pensioners. This confirmation comes amid growing demands from employee unions for interim relief before the 8th Central Pay Commission (CPC) report is prepared.
Demand for DA Merger Raised in Parliament
The issue of merging DA with basic pay was recently raised in the Rajya Sabha by Member of Parliament (MP) Javed Ali Khan. He questioned whether the government planned to merge 50% DA/DR with basic pay as a temporary relief, considering the impact of inflation over the past 32 years. In response, Minister of State for Finance, Pankaj Chaudhary, stated that no such proposal is currently under consideration.
Similarly, in a separate response in the Lok Sabha on March 17, 2025, the Finance Ministry stated that the terms of reference and timeline for the 8th Pay Commission report would be decided in “due course.”
Employee Unions Push for DA Merger
The staff side of the National Council of Joint Consultative Machinery (NC-JCM), a key body representing government employees, has been advocating for the merger of DA with basic pay. The union has demanded that this issue be included in the terms of reference for the 8th Pay Commission.
Despite these demands, the government has yet to formally establish the 8th Pay Commission. Reports indicate that it may be set up by April 2025.
Understanding Dearness Allowance (DA)
Dearness Allowance (DA) and Dearness Relief (DR) are provided to central government employees and pensioners to help them cope with inflation and maintain the purchasing power of their salaries and pensions. The DA/DR rate is revised every six months based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), which is published by the Labour Bureau under the Ministry of Labour and Employment.
Since the implementation of the 7th Pay Commission’s recommendations on January 1, 2016, the government has granted 15 installments of DA/DR to central government employees and pensioners.
While employee unions continue to push for interim relief, the Finance Ministry’s latest statement makes it clear that, as of now, merging DA with basic pay is not on the government’s agenda.
