8th CPC: No Proposal On DA-Basic Pay Merger Under Consideration Now, Says MoS Finance

The government's statement came in response to a query by Member of Parliament Anand Bhadauria, regarding the status of the new pay commission and possible relief measures for government employees facing rising living costs.

“No proposal regarding the merger of the existing DA with the basic pay is under consideration with the government at present,” Chaudhary said.

The Minister informed the House that a notification was issued for the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), adding that the commission will take up the task of reviewing the pay, allowances, and pension structure for Central Government employees and retirees.

Revision Of DA/DR Rates

"In order to adjust the cost of living and protect basic pay/pension from erosion in real value on account of inflation, the rates of DA/dearness relief (DR) are revised periodically, every six months, on the basis of the All India Consumer Price Index for Industrial Workers (AICPI-IW) released by the Labour Bureau, Ministry of Labour and Employment," the Minister informed the Parliament. 

Meanwhile, Bhadauria asked if the government had issued a notification for the constitution of the 8th CPC. The Minister replied, “The government has notified the resolution dated 03.11.2025 for the constitution of the 8th CPC." 

The DA for Central government employees hit 50% in January 2024. Ever since, many employees' associations have been urging the Finance Ministry to merge the DA with the basic pay.

As many as 69 lakh pensioners in the country are eagerly awaiting the 8th CPC’s recommendation, expected by next year.

Several of these, including the Confederation of Central Government Employees & Workers, the All India Defence Employees' Federation, and the All India Federation of Pensioners’ Association, have written to the government seeking amendments to the ToR.

What Is DA? 

The Central and State governments pay DA to their employees as a cost-of-living adjustment to offset the impact of inflation. The amount of DA is calculated on the basis of the average of the AICPI readings.

The DA of employees is revised by the Central government twice every year. Employees get DA as a percentage of their basic salary. The current DA stands at 58%. If the DA is merged with the basic pay, a new basic pay is formed.

Pay Commissions

The formation of the 8th CPC was first announced in January 2025, and its ToR was approved by the Union Cabinet in October 2025.  

The commission has been mandated to submit its recommendations within 18 months of its constitution. The recommendations are expected to impact around 50 lakh Central government employees and 69 lakh pensioners.

The pay commission is typically constituted once every 10 years to review and recommend changes in the salary structure, allowances, and pensions of government employees.

The 7th CPC was constituted in 2014, and its recommendations were implemented from 1 January 2016.