8th Pay Commission 2026 No DA Merger Plan Update:

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Finance Ministry confirmed in Parliament: No proposal to merge DA with Basic Pay under 8th CPC yet. Unions demanded 25% DA merger, but Govt rejected.
8th Pay Commission 2026 Lucknow Meeting DA Merger News No DA Merge Plan


 



 Sanchita chatterjee May 26, 2026:

What Is the 8th Pay Commission?
The Pay Commission is set up every 10 years to review and recommend changes to salary, pension, and allowances for central government employees and pensioners. The 8th Pay Commission’s recommendations are expected to take effect from January 1, 2026. It will impact over 50 lakh employees and 65 lakh pensioners.

 Key Demands From Staff Side
Employee unions have already placed major proposals before the government:

DA Merger: Merge 25% of Dearness Allowance into basic pay once DA crosses 50%. Right now, DA is at 50%+ after recent hikes, so unions argue merger should happen now to give real benefit.
New DA Formula: Replace the current CPI-IW based DA with an open-market inflation index. The staff side says the existing system doesn’t reflect actual expenses on food, rent, education, and healthcare.
Revised Base Year: Change the base year used for DA calculation. The current base doesn’t match present-day consumption patterns, unions claim.
Higher Minimum Wage: Raise the minimum basic pay. The 7th Pay Commission set it at Rs 18,000. Staff side wants a substantial jump citing inflation since 2016.
Better Fitment Factor: The fitment factor decides how much basic pay rises. 7th CPC used 2.57. Unions are pushing for 3.68 or higher this time.

 Why the DA Formula Matters
DA is revised twice a year to offset inflation. But unions argue the All India Consumer Price Index for Industrial Workers lags behind real market prices. They want DA linked to a broader basket of goods and services that reflects urban and semi-urban spending. If accepted, DA hikes could become larger and more frequent.

Impact on Pensioners
All changes to pay structure directly affect pensioners through “pension revision.” If 25% DA is merged into basic, the pension base increases. That means higher pension and gratuity for retirees. Family pensioners would also benefit.

Timeline and Next Steps
The Commission is still in the consultation phase. Employee federations, economists, and state govts are submitting views. The final report is expected in late 2025 or early 2026. After Cabinet approval, new pay scales would apply from Jan 1, 2026, with arrears likely.

What About State Govt Employees?
State governments usually adopt Central Pay Commission recommendations with modifications. So the 8th CPC will set the benchmark for 8+ crore state employees and pensioners too.

 The Fiscal Angle
Pay Commissions raise the govt’s wage bill significantly. The 7th CPC increased outlay by Rs 1.02 lakh crore annually. States often cite fiscal stress. Punjab CM Bhagwant Mann recently argued his govt is “clearing debt” while funding salaries, schools, and hospitals, showing how pay and state budgets are politically sensitive.

The 8th Pay Commission won’t just revise salaries. The debate over DA merger and inflation indexing could change how govt pay keeps up with real-world prices for the next decade.

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