8th Pay Commission: Will dearness allowance be merged with basic salary when the new pay commission comes or can the situation remain as it is? At the same time, another discussion is that the government will change the calculation of dearness allowance on the new pay commission.
8th Pay Commission: The wait is about to end now. The panel of the 8th Pay Commission will be formed in April. After this, its commission will start working on its recommendations. The central government had approved the formation of the 8th Pay Commission in January. The timeline of the 7th Pay Commission will end on 31 December 2025. At the same time, the new pay commission is to be implemented from 1 January 2026. However, after the formation of the panel, it may take about 15-18 months for its final report to come. According to sources, the panel can submit its recommendations by April-May 2026. But, it will take some more time for its final report to come. It is expected to be implemented by the year 2027. However, there is also a discussion that the recommendations may come anytime, but the 8th Pay Commission will be implemented from January 1, 2026. Meanwhile, another discussion is gaining momentum that whether the Dearness Allowance will be merged with the Basic Salary when the new Pay Commission comes or the situation can remain as it is? At the same time, another discussion is that the government will change the calculation of Dearness Allowance on the new Pay Commission. For this, the base year of Dearness Allowance can be changed. Let us understand what are the possibilities.
Base year can be changed
DA calculation is done on the data of AICPI-IW. The same has been happening in the first Pay Commission as well. It is expected that similar calculations will continue in the future as well. But, according to sources, the government can change the base year for DA calculation when the new pay commission is implemented. Currently, the base year for AICPI-IW is 2016, it was changed in the year 2016 when the 7th Pay Commission was implemented. Experts also believe that the base year can be changed when the 8th Pay Commission is implemented. The logic behind this is that inflation is increasing and the DA given to deal with the rising inflation should also be changed with the new base year. There is a possibility that the base year of dearness allowance can be 2026.
How will the calculation change?
DA is given to central government employees to deal with inflation. But, inflation has increased very rapidly in the last decade. But, due to the base year, the basis for measuring dearness allowance is the same. Its rates change in six months. It is possible that the government will keep AICPI-IW as the basis. But, the entire calculation can change just by changing the base year. In such a situation, the dearness allowance will become zero. And the dearness allowance will be calculated afresh.
Will the old dearness allowance be merged?
If the 8th Pay Commission is implemented by January 1, 2026, then considering the current situation, the dearness allowance will be up to 61%. It must be paid to the employees in their salary. But, if the base year changes, the old DA can be merged. However, the government has not formally said so yet. All this will be decided only after the recommendations of the 8th Pay Commission panel.
When did the dearness allowance become zero?
The recommendations of the 7th Pay Commission were implemented from January 1, 2016. At that time, the dearness allowance of central government employees was 125%. The 7th Pay Commission merged this 125% DA into the basic pay and included it in the new pay structure. Meaning, DA was made zero in the new salary matrix and further DA was calculated on the basis of the new basic salary.
New basic-pay structure introduced
During the 6th Pay Commission, the salary structure included ‘Pay in the Pay Band’ and ‘Grade Pay’. The 7th Pay Commission combined both of these to form a consolidated ‘Basic Pay’. The old basic pay and 125% dearness allowance were added to this new basic pay, which increased the total salary of the employees.
How did the pay-matrix change?
The 7th Pay Commission introduced a new pay-matrix, in which salaries were determined on the basis of different levels and sales. This matrix gave clear guidance for salary hikes and promotions at every level. Now it remains to be seen whether the government has changed the entire calculation of DA by changing the old base year or not. At the same time, what kind of recommendations does the panel of the 8th Pay Commission give. Only after the recommendations are received will it be clear what will change and how much. Whether it is an increase in salary or the calculation of dearness allowance.
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