8th Pay Commission: The Central Government has made it clear that at present there is no plan to merge the Dearness Allowance (DA) of the employees with the basic salary. This update was given by Pankaj Chaudhary, Minister of State in the Finance Ministry, in response to the question of MP Anand Bhadauria in the Lok Sabha on 1 December 2025. However, the Central Government has notified the process of constituting the Eighth Central Pay Commission. Meanwhile, the biggest question that arises is how much the salary of employees can increase under the Eighth Pay Commission? Let us know…
How much can the salary increase?
According to some reports, if the 8th Pay Commission is implemented, the total actual salary (Basic + DA) of central government employees may increase by 14% to 54%. However, the possibility of an increase of 54% is considered less. A report says that the government can also use this increase as a step to increase consumption. The estimates of probable salary increase have been prepared assuming fitment factors of 1.92 and 2.57 for Grade Pay 1900, 2400, 4600, 7600 and 8900. This also includes HRA 24%, TA ₹3,600₹7,200, NPS 10% and CGHS charges.
Dearness Allowance and its meaning
Dearness Allowance i.e. DA is given by the government to protect the employees from the effects of inflation. This rate is decided on the basis of All India Consumer Price Index (ACPI-IW) and is revised every six months. Currently DA is 58%, that is, an employee with a basic pay of Rs 1 lakh gets DA of Rs 58,000. The purpose of DA is to keep the real value of the employees’ salary in line with inflation.
Employees’ demands and government’s position
Many employee associations have been demanding for a long time that DA should be merged with the basic salary. If this happens, then at the time of next allowance increase the total salary will increase according to the basic salary. However, the Finance Ministry clarified that at present no such proposal is under consideration and there is no plan to merge the dearness allowance directly into the basic.
Future of 8th Central Pay Commission
The government issued the notification for the formation of the Eighth Central Pay Commission on 3 November 2025. Once the recommendations of this commission are implemented, there will be changes in the basic pay and allowances of the employees. Despite DA not being merged into basic, employees will see its benefit in the next salary hike. This step can prove to be beneficial for the employees in the long run.
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