8th pay commission da merger has become the hottest topic among over 5 million central government employees after the government officially rejected plans to merge dearness allowance with basic pay.
The announcement came as a major disappointment on December 1, 2025, when the Finance Ministry clarified its stand in Parliament. This decision has sparked widespread protests and heated discussions across employee unions who were hoping for immediate financial relief.
The 8th Central Pay Commission was formally notified in November 2025 under the leadership of Justice Ranjana Prakash Desai. While employees celebrated the formation of this commission, their hopes for quick DA merger were crushed within weeks.
Currently, central government employees receive 55 percent DA on their basic pay after a 3 percent hike announced in October 2025. Many employees expected this DA to be merged with basic salary, which would have instantly boosted their linked benefits like HRA, provident fund and gratuity by more than 50 percent.
However, the government has made it clear that any such merger will only be considered after the commission submits its final recommendations, expected by mid 2026.
Key Takeaways
- Government officially rejected immediate DA merger with basic pay for central employees in December 2025
- Current dearness allowance stands at 55 percent of basic pay, projected to reach 58 percent by early 2026
- 8th Pay Commission will submit recommendations within 18 months, with implementation likely from January 2026
- Employee unions are planning major protests demanding DA merger, 20 percent interim relief and old pension scheme
- Fitment factor projections range from 2.28 to 2.86, which could result in 14 to 54 percent real pay increase
- Minimum basic pay may jump from current 18000 rupees to anywhere between 32940 to 51480 rupees
- Over 5 million employees and 6.5 million pensioners will be affected by final commission decisions
Why Government Rejected DA Merger Now
The Finance Ministry explained in Parliament that merging DA with basic pay right now would put unnecessary fiscal pressure on government finances. Officials argue that the 8th Pay Commission needs to first complete its comprehensive review of salary structures before any major changes.
The government wants to maintain financial discipline and avoid hasty decisions that could impact the economy.
Many experts support this cautious approach. They point out that immediate DA merger without proper planning could create budget problems.
The commission is reviewing not just salaries but also allowances, pensions and bonuses for various categories including defense personnel and judicial officers. A premature merger might complicate these calculations and delay the entire process.
What Employees Are Losing Without DA Merger
Central government employees feel cheated because DA merger directly impacts multiple components of their salary package.
When DA gets merged with basic pay, it immediately increases house rent allowance which is calculated as a percentage of basic salary. Similarly, provident fund contributions and gratuity payments also go up significantly.
Union leaders have calculated that without DA merger, employees are missing out on substantial monthly benefits. For someone earning 50000 rupees basic pay with 55 percent DA, a merger would boost the new basic to 77500 rupees. This would then increase HRA from around 12000 rupees to 18600 rupees in metro cities. The compounding effect on retirement benefits is even more dramatic.
Employee unions like the Confederation of Central Government Employees have called the decision a betrayal. They argue that rising inflation is eating into real wages and immediate relief is necessary. Social media platforms are flooded with frustrated posts from government servants who feel their concerns are being ignored.
Projected Salary Hike Under 8th Pay Commission
Despite the DA merger setback, employees still have reasons to stay hopeful about overall salary revision. The 8th Pay Commission is expected to recommend a fitment factor between 2.28 and 2.86, compared to 2.57 in the previous commission. Historical data shows that 6th Pay Commission delivered a massive 54 percent real increase while 7th Pay Commission was more conservative at 14.3 percent.
| Fitment Factor | New Minimum Basic Pay | Estimated Total Hike |
|---|---|---|
| 2.28 (Low) | 41040 rupees | 14 to 20 percent |
| 2.57 (Moderate) | 46260 rupees | 25 to 30 percent |
| 2.86 (High) | 51480 rupees | 35 to 54 percent |
Most analysts predict a moderate scenario with 30 to 35 percent overall hike including eventual DA merger. This means someone currently earning minimum basic pay of 18000 rupees could see it jump to around 46000 rupees after implementation. Higher pay scales will see proportional increases across all levels.
What Happens Next for Central Employees
The commission has 18 months to submit recommendations, which means reports should arrive by mid 2026. However, experts expect delays due to ongoing refinements in terms of reference. Implementation will likely happen from January 2026 onwards, though retrospective effect from January 1, 2026 is being demanded by unions.
Meanwhile, employee organizations are not sitting quiet. Major protests are planned for December 2025 demanding immediate DA merger, 20 percent interim relief and restoration of old pension scheme. Union leaders are seeking direct intervention from the Prime Minister’s office to reconsider the DA merger decision.
The government maintains that patience is necessary for comprehensive reform. Officials emphasize that the commission will examine all aspects including modern expenses like digital costs that were not considered earlier. The final package is expected to be balanced, promoting talent retention without creating unsustainable fiscal burden.
For now, central government employees must wait and watch while hoping that final recommendations bring substantial relief that compensates for the current disappointment over DA merger rejection.
