DA Merger With Basic Pay? Here’s What Govt Says

The Centre has clarified that there is no proposal under consideration for merging the dearness allowance (DA) or dearness relief (DR) with the basic pay. Minister of State in the Ministry of Finance, Pankaj Chaudhary, answered this to a question in Lok Sabha on December 1, 2025.

He said: “No proposal regarding the merger of the existing dearness allowance with the basic pay is under consideration with the government at present. In order to adjust the cost of living and to protect Basic Pay/Pension from erosion in real value on account of inflation, the rates of DA/DR are revised periodically every six months on the basis of All India Consumer Price Index for Industrial Workers (AICPI-IW released by the Labour Bureau, Ministry of Labour and Employment.”

The reply came to a question asked by Parliamentarian Anand Bhadauria about whether the government had plans to merge DA and DR with the basic pay to provide relief to the employees and pensioners and support them in tackling retail inflation. 

Since the DA and DR reached beyond 50 per cent of the basic pay, several employee unions have urged the government to merge 50 per cent of the DA with the basic pay, and the demands have grown with the formation of the 8th Central Pay Commission (CPC). The employee unions have demanded a merger of DA/DR, so that the basic salary increases and, as a result, DA/DR increases, too.  

Note that DA is the term used for employees and DR for pensioners.

Here are the historical DA/DR rates:

Historical DA/DR Rates

Date From Which Payable                    Rate              

1st July 2025                                           58%    

1st Jan 2025                                                55%    

1st July 2024                                           53%    

1st Jan 2024                                                50%    

1st July 2023                                           46%    

1st Jan 2023                                                42%    

1st July 2022                                           38%    

1st Jan 2022                                                34%    

1st July 2021                                            31%    

1st July 2019                                             17%    

1st Jan 2019                                                12%    

1st July 2018                                             9%      

1st Jan 2018                                                 7%      

1st July 2017                                             5%      

1st Jan 2017                                                 4%      

1st July 2016                                             2%      

1st Jan 2016                                                 -

Source: Pensioner Portal

8th Central Pay Commission

The DA/DR merger requests are important now as the 8th Pay Commission has been formed and has also been directed to give its recommendation within 18 months from the date of its constitution in November this year.

On Bhadauria’s question about the notification of the 8th Pay Commission’s terms of reference (ToR), the minister shared that the resolution was notified on November 3, 2025. Accordingly, the 8th CPC will provide recommendations about revising salary and its structure to attract talent to government jobs, and promoting accountability, efficiency, and responsibility. Once the recommendations are approved, they are expected to be implemented, which would likely be after 2027.