📑 Table of Contents
The Short Answer
No DA merger with basic pay has been approved or proposed by the Government. On 1 December 2025, the Minister of State for Finance, Pankaj Chaudhary, told the Lok Sabha that "no proposal regarding merger of the existing Dearness Allowance with the Basic Pay is under consideration". DA stays at 60% (63% from July 2026 is pending approval) and keeps rising every six months until the 8th CPC pay matrix starts. At that point the accumulated DA is absorbed into the new basic through the fitment factor, and DA restarts at 0%.
"DA merger" has become one of the fastest-rising 8th Pay Commission searches, driven by forwarded messages claiming a merger is imminent. This page sets out what is official, what history shows and what a merger would actually change in your salary slip.
What the Government Has Officially Said
- 1 December 2025, Lok Sabha: no proposal to merge existing DA with basic pay; DA and DR will continue to be revised every six months on the basis of the All India CPI for Industrial Workers.
- Terms of Reference (3 November 2025): the 8th CPC's mandate covers pay, allowances and pension, but contains no instruction on an interim DA merger.
- DA decisions in 2026: the Cabinet approved DA at 60% from 1 January 2026 (in April 2026), and the July 2026 revision to 63% is awaiting approval. Both follow the normal 7th CPC formula, which is evidence that no merger is planned before the new pay matrix.
What the 5th, 6th and 7th CPCs Did
| Pay Commission | Recommendation on DA | What happened |
|---|---|---|
| 5th CPC (1997) | Convert DA into "Dearness Pay" each time the CPI rises 50% over the base; Dearness Pay to count for retirement benefits | 50% DA was merged as Dearness Pay from 1 April 2004 |
| 6th CPC (2008) | "Not recommending merger of dearness allowance with basic pay at any stage" | No merger; DA reset when the new pay bands began |
| 7th CPC (2016) | Keep the existing DA formula, which "has worked well over the years" | No merger; DA reset to 0% on 1 January 2016, 125% absorbed via the 2.57 fitment factor |
| 8th CPC (pending) | Not yet known | Government: "no proposal" to merge before the new matrix |
So the only DA merger in recent history came from the 5th CPC's specific recommendation. Since 2008 the official position has been that DA is protected through the fitment factor at each pay commission, not by interim mergers.
How DA Is Absorbed at the Start of a New Pay Commission
Every fitment factor has a "DA protection" part and a "real increase" part:
Fitment factor = (1 + DA absorbed) × (1 + real increase)
7th CPC: 2.25 (absorbing 125% DA) × 1.14 = 2.57
8th CPC: 1.58 (absorbing 58% DA on 31 Dec 2025) × (1 + real increase)
This is why the 8th CPC report will, in effect, merge DA: on day one, your new basic pay already includes the 58% DA you had on 31 December 2025, and DA starts again from zero. Try it with the fitment factor derivation tool.
What Unions Are Demanding
- FNPO (postal federation): merge DA with basic pay whenever it crosses 25%, and pay DA point-to-point without rounding down.
- Bharat Pensioners Samaj: quarterly DA/DR revision based on a three-month average, and merging DR with basic pension once it exceeds 25%.
- IRTSA and others: a separate price index for government employees, and a family unit of five instead of three in the CPI-IW basket.
- NC-JCM: a much higher starting point instead — ₹69,000 minimum pay and a 3.833x fitment factor. See the memorandum.
The Commission's own questionnaire asked whether a hybrid indexation model (inflation plus wage growth) should replace the current DA formula, so the report may change how DA works in future, even if there is no interim merger.
Merger vs No Merger: What Changes in Your Pay
Suppose, hypothetically, 50% DA were merged into basic pay today. Basic + DA would barely change at first, because the merged 50% simply moves from the DA line to the basic line, and the remaining 10% stays as DA:
| Level | Basic now | Basic + 60% DA now | New "basic" after 50% merger | Remaining DA (10%) |
|---|---|---|---|---|
| Level 1 | ₹18,000 | ₹28,800 | ₹27,000 | ₹1,800 |
| Level 4 | ₹25,500 | ₹40,800 | ₹38,250 | ₹2,550 |
| Level 6 | ₹35,400 | ₹56,640 | ₹53,100 | ₹3,540 |
| Level 7 | ₹44,900 | ₹71,840 | ₹67,350 | ₹4,490 |
| Level 10 | ₹56,100 | ₹89,760 | ₹84,150 | ₹5,610 |
The gains would come from items linked to basic pay: HRA (a % of basic), NPS/GPF contributions, gratuity and pension calculations, and some allowances. That is why unions push for it — and why it is costly for the Government.
What to Watch
- Written replies in the Winter Session of Parliament — the clearest source for any change in the official position.
- The July 2026 DA decision (expected at the Cabinet meeting on 28 October) and the January 2027 DA.
- The 8th CPC report (around May 2027), which will say how much DA is absorbed and whether the DA formula changes.
Latest DA status: DA Hike July 2026. All other developments: 8th Pay Commission Latest News Today.
🧮 Try It Yourself
Work out your own numbers with the 8th Pay Commission Calculator for Central Govt Employees, the Fitment Factor Calculator or the Arrears Calculator.
Frequently Asked Questions
Will DA be merged with basic pay under the 8th Pay Commission?
Is there a rule that DA merges when it crosses 50%?
Why do employees want DA merged with basic pay?
What DA will be merged at the start of the 8th CPC?
Will DA become zero after the 8th Pay Commission?
Sources
- Gconnect — Lok Sabha reply: no DA merger (1 Dec 2025)
- StaffNews — No merger of DA with basic pay: reply in Lok Sabha
- Upstox — DA merger: what the 5th, 6th and 7th CPCs did (23 Oct 2026)
- Karmactive — DA merger demand: what the Government has said
- Goodreturns — 8th Pay Commission latest (17 Oct 2026)