The central government has recently approved an increase of 2% in Dearness Allowance – DA of central employees. Now the DA of employees has increased to 55% of the basic salary, which was 53% earlier. However, this increase is said to be the lowest in the last few years. With this, now another big question has come out – will DA be merged in the basic salary? And what will be the benefit of employees from the 8th Pay Commission?
DA increased but less than expected
Every six months the government reviews DA, which not only increases salary, but also increases other allowances like HRA (House Rent Allowance) and TA (Travel Allowance).
This time the DA has increased by only 2% for January 2025, which is said to be the lowest in the last seven years.
For example:
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Increasing 2% DA at Basic Salary ₹ 18,000 will benefit ₹ 360 every month.
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At the same time, ₹ 9,000 pension will increase by ₹ 180 every month.
8th Pay Commission: Will salary structure change?
In January 2024, the Central Government has approved the formation of the 8th Pay Commission, which will be implemented from 1 January 2026. This commission will revision central employees’ salary, allowances and other facilities.
Employees hope that the implementation of the 8th Pay Commission will increase their basic salary and allowances. Apart from this, it is also under discussion whether the dearness allowance will be again merged into the basic salary?
Demand for DA merger and government’s response
There was a provision in the 5th Pay Commission that if the DA is more than 50%, it should be merged into the basic salary. It was also discussed in the 6th and 7th Pay Commission, but was not implemented.
Now that DA has reached 55%, the demand for DA merger is again arising from the employee organizations.
But Minister of State for Finance Pankaj Chaudhary clearly stated in Rajya Sabha that
“There is no plan to merge DA in basic salary at the moment.”
After this statement, the employees’ organizations have been disappointed, but after the report of the 8th Pay Commission, it may be considered again.
Fitment Factor: How does the mathematics of salary change?
Fitment factor is the coefficient on the basis of which salary is increased.
It was 2.57 in the 7th Pay Commission, and now it is reported that it can be extended to 2.86 in the 8th Pay Commission.
For example:
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If the basic salary of an employee is ₹ 50,000, and the fitment factor is 2.86, then it will have a new salary:
₹ 50,000 × 2.86 = ₹ 1,43,000 per month (estimated)
This can lead to a huge bounce in the salary of the employees, which will give them better economic security and purchasing power.
What will be the benefit from the 8th Pay Commission?
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There is a huge increase in salary, especially if DA merges.
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HRRA and TA will also increase with increasing basic salary.
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The pension received after retirement will also be decided according to the new salary.
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The attraction in government services will increase, which will attract talented youth towards this.
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