8th Pay Commission: Demand to Merge DA With Basic Pay Resurfaces

As discussions around the 8th Pay Commission gather pace, the staff side of the National Council of Joint Consultative Machinery (NC-JCM) has revived a long-standing demand: the inclusion of a clause in the Terms of Reference (ToR) for merging Dearness Allowance (DA) with basic pay.

Why Merge DA in the 8th Pay Commission?

The staff side has suggested that the 8th Pay Commission determine the percentage of DA/DR (Dearness Relief for pensioners) to be merged with pay and pension. This is rooted in the belief that periodic inflationary adjustments through DA should also contribute to the long-term earnings of employees and pensioners.

Historical Precedents Before the 8th Pay Commission

During the 5th Pay Commission (1996–2006), there was a provision to merge DA with basic pay once it crossed the 50% threshold. Accordingly, in 2004, the government merged 50% of DA with basic pay.

The 5th CPC had proposed 2 options:

1. Set up a permanent pay commission with constitutional backing and annual binding recommendations.

1. Convert DA into dearness pay every time the cost of living rose by 50% from the base.

The 5th CPC believed this conversion was necessary due to inflation rising steadily over a five-year cycle.

6th and 7th Pay Commission Viewpoints

The 6th CPC (2006–2016) rejected the idea of DA merger, citing a revised pay structure involving pay bands and grade pay. It argued that such a setup made periodic DA merger redundant, as allowances were already inflation-linked.

The 7th CPC (implemented in 2016) also didn’t recommend a direct merger. Instead, it proposed a 25% hike in the consolidated pay package once DA touches 50%, acknowledging inflation’s impact on purchasing power.

Conclusion

As the 8th CPC draws nearer, government employees and pensioners are hopeful that the merger clause will be reinstated. It could lead to higher take-home pay and better pension calculations, especially during high inflationary phases.

Read more on: 8th Pay Commission: Basic Salary May Rise to ₹79,794 with DA Merger and Fitment Factor

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