8th Pay Commission 2026: DA Merger, Basic Salary Hike and Pension Demands Explained

8th Pay Commission Latest News, October 24, 2026: Central government employees and pensioners are awaiting important decisions on salary revisions, Dearness Allowance (DA) and pension benefits. The latest round of discussions involving the Eighth Pay Commission and employee organisations reportedly concluded in Mumbai on October 23, raising expectations of changes to the existing pay structure.

The two-day meeting, held on October 22 and 23, focused on several demands submitted by employee representatives. These include a higher fitment factor, improvements in basic salary, changes to DA calculations and more frequent revisions of Dearness Relief (DR) for pensioners.

One of the most discussed proposals involves incorporating DA into basic salary once the allowance reaches a specified level.

According to the report, the Federation of National Postal Organisations (FNPO) has suggested merging DA with basic pay after it exceeds 25%. Pensioners' representatives have separately requested quarterly reviews of DA and DR.

However, the Commission has not announced any final decision on merging DA with basic salary. The proposals remain under consideration.

Mumbai Meeting Brings Fresh Focus to Salary Reforms

The Eighth Pay Commission, headed by Justice Ranjana Prakash Desai, has reportedly completed another round of consultations with employee organisations.

The latest discussions took place in Mumbai on October 22 and 23.

Earlier consultations were reportedly conducted in Delhi, Ladakh, Kolkata and Bengaluru.

These meetings provide employee representatives with an opportunity to present their concerns about the existing compensation system and suggest improvements.

The issues under discussion extend beyond the minimum basic salary.

Employee organisations are also seeking changes in the fitment factor, inflation-related allowances, pension calculations and the treatment of DA under the revised pay structure.

The Commission will need to examine these representations before preparing its recommendations.

Completing a meeting does not mean that the demands presented during it have been approved.

Will Dearness Allowance Be Added to Basic Salary?

The possibility of merging DA with basic pay is among the most significant proposals being discussed.

At present, DA is calculated separately as a percentage of an employee's basic salary.

For example, an employee receiving ₹40,000 in basic pay with DA at 60% would receive ₹24,000 as Dearness Allowance.

The combined amount would be ₹64,000, but the employee's official basic pay would remain ₹40,000.

If a DA merger were introduced, a specified portion of the allowance could become part of the basic salary.

Such a change could affect the calculation of other allowances and certain retirement-related benefits, depending on the final rules.

However, it would not automatically mean that employees receive the merged DA amount as an additional payment on top of their existing salary.

The government would need to determine how the revised basic pay and future DA calculations would operate.

Postal Employees Want DA Merger Above 25%

The Federation of National Postal Organisations has reportedly proposed a new threshold for incorporating DA into basic salary.

According to the report, the organisation wants DA to be merged with basic pay whenever the allowance exceeds 25%.

This proposal differs from the 50% threshold associated with earlier Dearness Pay arrangements.

Employee representatives argue that a merger mechanism could prevent basic salaries from becoming increasingly disconnected from inflation-adjusted earnings.

If such a proposal is considered, the Commission would need to examine its effects on salary calculations, future DA revisions and government expenditure.

The proposed 25% threshold has not been approved.

Employees should therefore continue treating DA as a separate salary component under the existing rules.

How Could a DA Merger Affect Monthly Salary?

A hypothetical calculation can help explain the difference between the current arrangement and a possible merger.

Consider an employee whose basic salary is ₹30,000 and whose DA rate is 60%.

In this illustration, the original basic salary and DA together equal ₹48,000.

If the entire allowance were merged into basic pay, the revised basic salary could become ₹48,000 before any other pay revision.

However, the DA rate would normally need to be reset or recalculated under the new structure.

Therefore, the example does not indicate an automatic increase of ₹18,000 in take-home salary.

The actual financial impact would depend on the Commission's recommendations and the government's implementation rules.

Pensioners Demand DA and DR Reviews Every Three Months

Pensioners' organisations have also raised concerns about the frequency of inflation-related adjustments.

According to the report, Bharat Pensioners Samaj has requested quarterly reviews of DA and DR instead of the existing half-yearly arrangement.

Under the current central government system, DA and DR are generally revised with effect from January and July, subject to government approval.

Pensioners argue that a six-month interval may leave retirement income under pressure when living costs increase rapidly.

A quarterly review system could allow inflation-related adjustments to be considered more frequently.

However, such a change would require modifications to existing procedures and could increase administrative complexity.

The Commission has not announced whether it will recommend quarterly revisions.

Proposal to Include DR in Basic Pension

Another demand concerns the treatment of Dearness Relief.

DR is paid to eligible pensioners and family pensioners to help offset the impact of inflation.

It is calculated separately from basic pension.

According to the report, pensioners' representatives have suggested incorporating DR into basic pension after it reaches a specified threshold.

Supporters of the proposal believe this could strengthen the pension calculation base.

However, any change would depend on the threshold adopted, the method of restructuring and the applicable pension rules.

There is currently no confirmed decision to merge DR with basic pension under the Eighth Pay Commission.

What Did the Fifth Pay Commission Recommend?

The debate over merging DA with basic salary is not new.

The Fifth Central Pay Commission supported a mechanism for converting a portion of DA into Dearness Pay when inflation crossed a specified threshold.

The arrangement was associated with a 50% increase over the relevant base index.

The purpose was to ensure that inflation-related compensation received appropriate treatment in salary and retirement benefit calculations.

Dearness Pay was subsequently used for specified calculations under the applicable government arrangements.

The Fifth Pay Commission also emphasised providing inflation compensation across different employee pay levels.

This earlier approach is frequently cited by employee organisations seeking a similar mechanism under the Eighth Pay Commission.

Why Did the Sixth Pay Commission Take a Different Approach?

The Sixth Central Pay Commission did not support continuing an automatic merger of DA with basic salary at a fixed threshold.

Instead, it favoured a revised compensation framework in which inflation-related adjustments could be managed through the existing allowance system.

The Commission also retained the half-yearly revision cycle for DA.

Its approach was based on the view that the revised salary structure could provide appropriate compensation without repeatedly converting DA into basic pay.

This marked an important departure from the earlier Dearness Pay mechanism.

What Changed Under the Seventh Pay Commission?

The Seventh Central Pay Commission broadly continued the existing system for calculating Dearness Allowance.

It did not recommend introducing a new automatic DA merger arrangement.

DA remained a separate component of employee compensation, with revisions linked to the applicable inflation index and government decisions.

The Seventh Pay Commission also introduced a fitment factor of 2.57 for determining revised basic pay under its pay matrix.

The minimum basic pay for central government employees was fixed at ₹18,000.

The Eighth Pay Commission is now examining demands for further changes to this framework.

DA Merger Rules Under Previous Pay Commissions

The history shows that successive Pay Commissions have adopted different approaches to inflation compensation.

Whether the Eighth Pay Commission recommends a return to a merger mechanism remains uncertain.

Employees Also Want Changes to the DA Calculation Formula

Another proposal involves reviewing the All-India Consumer Price Index for Industrial Workers, commonly known as AICPI-IW.

This index plays a central role in determining DA adjustments for central government employees.

It tracks changes in the prices of goods and services included in the relevant consumption basket.

Employee organisations want the Commission to examine whether the existing calculation methodology adequately reflects present-day living costs.

The review could involve examining the index methodology, consumption patterns and the relationship between inflation and allowance revisions.

However, the report does not identify any officially approved replacement formula.

Any change would require technical assessment and a subsequent government decision.

Will the Fitment Factor Increase Under the 8th Pay Commission?

Employee organisations are also seeking improvements in the fitment factor used to calculate revised basic salaries.

A fitment factor is a multiplier applied to existing basic pay when transitioning to a new pay structure.

The Seventh Pay Commission used a fitment factor of 2.57.

For the Eighth Pay Commission, different figures have been discussed in employee demands and public commentary.

However, no final fitment factor has been approved in the supplied report.

The following calculations show how different hypothetical multipliers would affect an existing basic salary of ₹18,000.

These figures are illustrative calculations, not official salary recommendations.

The final revised salary would depend on the approved pay matrix, fitment factor, DA treatment and other applicable rules.

What Happens After the Mumbai Meeting?

The Eighth Pay Commission is expected to evaluate the suggestions submitted during its consultations.

These may include demands concerning minimum pay, fitment factors, DA merger thresholds, pension benefits and inflation measurement.

The Commission will need to assess the proposals in the context of employee requirements and their financial implications.

After completing its review, it will prepare recommendations for government consideration.

The central government will then decide which recommendations to accept and how they should be implemented.

Until the process is complete, no particular DA merger formula or revised salary amount should be treated as final.

Final Takeaway

The Eighth Pay Commission's Mumbai consultations have brought renewed attention to demands for changes in basic salary, Dearness Allowance and pension benefits.

The FNPO has reportedly sought DA merger with basic pay after the allowance exceeds 25%, while Bharat Pensioners Samaj wants more frequent DA and DR revisions.

Employee organisations have also called for a review of the AICPI-IW calculation system and improvements in the fitment factor.

For now, there is no confirmed decision to merge DA with basic salary or DR with basic pension. Central government employees and pensioners will need to wait for the Commission's recommendations and subsequent government approval.

Disclaimer: This article is based on the supplied October 24, 2026 report. Employee and pensioner demands are proposals, not approved policy changes. Salary calculations are examples and should not be interpreted as confirmed Eighth Pay Commission benefits.