8th Pay Commission update: How much salary hike can employees expect with DA merger? All you need to know

Central government employees have demanded the merger of DA with basic pay under the 8th Pay Commission.

Written by: Gazi Abbas Shahid

Published: November 28, 2025, 6:46 PM IST

Share

Share Article

• Facebook
• WhatsApp
• X
• Email
• Telegram
• Linkedin

https://www.india.com/business/8th-pay-commission-update-how-much-salary-hike-can-employees-expect-with-da-merger-all-you-need-to-know-8205359/ Copy

Representational Image

8th Pay Commission update: There is discontent among central government employees over the Terms of Reference (ToR) of the 8th Pay Commission, with several employees’ bodies and workers unions raising multiple demands including certain amendments in the ToR, implementing the 8th CPC retrospectively from January 1, 2026, and merger of Dearness Allowance (DA) and Dearness Relief (DR) with basic pay.

How DA merger could boost salary, pension?

Employees argue that DA increments have failed to keep up with retail inflation over the last three decades, and the allowance has crossed the 50 percent threshold that requires a merger to provide an immediate relief to workers.

It is expected that DA merger would offer immediate relief to over 1.2 crore employees and pensioners by providing a significant hike to salary and pension, as DA has not matched retail inflation for over three decades.

Notably, the last DA merger took place ahead of the 6th Pay Commission in 2004, which had resulted in a significant salary hike and enhanced retirement benefits as most allowances and pension components are calculated based on basic pay.

What are the other demands?

Employees’ bodies, including the Central Govt Employees & Workers, has flagged several concerns about ToR for the 8th Pay Commission, which was approved earlier this month, claiming that around 69 lakh pensioners have been excluded from the pay panel, and the ToR does not mention an implementation date for the 8th CPC.

It is expected that Finance Minister Nirmala Sitharaman will address these concerns and also consider other demands made by the unions, such as the revival of the Old Pension Scheme (OPS) for all employees, during the Winter Session of the Parliament which begins on December 1.

Earlier this week, the Confederation of Central Govt Employees & Workers put forth its ‘Charter of Demands’, which includes the following demands;

• Amendments in the ToR for the 8th Pay Commission CPC by incorporating suggestions/views given by Confederation and staff side NC-JCM on Revision of emoluments of Employees and Pensioners and other issues.
• Merging 50% DA/DR with Basic Pay/Pension.
• Granting 20% of Pay/Pension as an Interim Relief (IR) w.e.f. 1.1.2026.
• Revival of Old Pension Scheme for all employees, and scrapping NPS/UPS.
• No distinctions amongst pensioners should be made, potentially on the basis of factors like Date of Retirement and Accepted recommendations of Central Pay Commission.
• Release of three instalments (18 months) of DA/DAR frozen during Covid pandemic to Employees and Pensioners
• Restoration of commuted part of pension after 11 years instead of 15 years.
• Removal of 5% ceiling imposed on Compassionate Appointment, grant Compassionate Appointment in all cases to wards/Dependants of Deceased employee.

When will 8th Pay Commission be implemented?

Earlier this month, on November 3, Prime Minister Narendra Modi-led Union Cabinet approved the terms of reference (ToR) of the 8th Pay Commission, which will benefit 50 lakh central government employees and 69 lakh pensioners and will have implications on the emoluments of the staff of state governments.

If we go by the implementation of previous pay commissions, the government usually takes about 18 to 24 months to implement the recommendations of the commission. Thus, its unlikely that 8th Pay Commission would be implemented before mid-2027, while reports suggest that the next CPC implementation might be pushed back to early 2028.