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8th Pay Commission: The Central Government has clarified that there are currently no plans to merge employees' dearness allowance (DA) into their basic salary. This update was provided by Minister of State for Finance, Pankaj Chaudhary, in response to a question from MP Anand Bhadoria in the Lok Sabha on December 1, 2025. However, the Central Government has notified the process for the formation of the Eighth Central Pay Commission. Meanwhile, the biggest question that arises is how much employees' salaries increase under the Eighth Pay Commission. Let's find out...

How much could salaries increase?
According to some reports, upon implementation of the 8th Pay Commission, the total actual salary (Basic + DA) of central government employees could increase by 14% to 54%. However, a 54% increase is considered unlikely. One report suggests that the government could also use this increase as a consumption-boosting measure. The potential salary increase estimates are based on fitment factors of 1.92 and 2.57 for grade pay scales 1900, 2400, 4600, 7600, and 8900. This includes HRA 24%, TA ₹3,600/₹7,200, NPS 10%, and CGHS charges.

Dearness Allowance and Its Meaning
Dearness Allowance (DA) is provided by the government to protect employees from the effects of inflation. This rate is determined based on the All India Consumer Price Index (ACPI-IW) and is revised every six months. Currently, DA is 58%, meaning an employee with a basic pay of ₹1 lakh receives ₹58,000 DA. The purpose of DA is to maintain the real value of employees' salaries in line with inflation.

Employee Demands and Government Position
Many employee associations have long demanded that DA be merged with the basic salary. If this were done, the total salary would increase in proportion to the basic salary at the time of the next allowance increase. However, the Finance Ministry clarified that no such proposal is currently under consideration and there are no plans to directly merge the dearness allowance into the basic salary.

Future of the 8th Central Pay Commission
The government issued a notification on November 3, 2025, regarding the formation of the 8th Central Pay Commission. Implementation of this commission's recommendations will result in changes to employees' basic pay and allowances. Despite DA not being merged into the basic salary, employees will see its benefits at the next salary increase. This move could prove beneficial for employees in the long run.

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