Though the Central government has reiterated that there would be no merger of DA with the basic pay, many employees' bodies have long been demanding the merger of DA with the basic pay to provide interim relief to employees and pensioners. According to sources, the associations have been demanding a DA merger as inflation, over the past several years, substantially reduced the purchasing power of employees.

In a letter to the 8th CPC Chairperson, the FNPO said that the merger of 50% of DA would provide immediate financial relief, restore partial purchasing power, and ensure economic dignity to lakhs of employees and pensioners across the country.

Interim Relief

Sivaji Vesireddy, secretary general, FNPO, in a letter, stated that, considering rising inflation and delay in the implementation of the 8th CPC, employees and pensioners should be provided with interim relief in the form of the merger of 50% DA with basic pay.

DA/DR is given to government employees and pensioners to neutralise the impact of price rise, based on the All India Consumer Price Index Industrial Workers (AICPI-IW). The government revises the DA twice a year, in July and January.

The employees' bodies had also staged a one-day nationwide strike on 12th February 2026, citing delays in the implementation of the 8th Central Pay Commission.

The current DA and DR, which are given to pensioners, stand at 58% each, with a 2% rise expected soon. 

Still, the Central government employees would need to wait for several months before receiving a revised salary and arrears in their respective accounts.

How Will Merger Benefit Employees

Since allowances and retirement benefits are calculated on basic pay, the non-merger of DA leads to stagnation in actual financial improvement. The merger of 50% DA would:

• Enhance house rent allowance, transport allowance, and other pay-linked benefits
• Improve pension, gratuity, and other retirement benefits
• Provide long-term financial stability to employees and pensioners

There are an estimated 7.5 million Central government employees in the country, which includes defence personnel, the Railways, and public sector undertakings. Moreover, about 69 lakh pensioners in the country are eagerly awaiting the 8th CPC’s recommendations.

Although the government has approved the Terms of Reference for the 8th CPC, its recommendations are yet to be submitted.

The government, in November last year, asked the 8th CPC to submit its recommendation report within 18 months. Due to this delay, employees' bodies want the government to merge DA with the basic pay.