8th Pay Commission: The DA increase will provide immediate relief and additional funds for festive expenses. At the same time, the 8th Pay Commission recommendations will provide lasting financial benefits in the long term. This is a dual-benefit opportunity for central government employees and pensioners. First, the immediate benefit from the DA increase and second, the long-term benefit from the 8th Pay Commission recommendations. This Diwali is going to be special for central government employees and pensioners. The Modi government is preparing to take two major decisions that could directly improve the salaries and pensions of employees and pensioners.

Dearness Allowance (DA) Increase

Dearness Allowance (DA) is provided by the government to protect employees from inflation and is revised every six months. In March 2025, DA was increased from 53% to 55%. Now, according to media reports, it is likely to be increased to 58%, benefiting approximately 12 million central government employees and pensioners.

For example, if someone’s pension is ₹9,000, with 55% DA, it would be ₹4,950, while at 58% DA, it would increase to ₹5,220, resulting in a monthly increase of ₹270. While this amount may seem small on a monthly basis, over the course of the year, it would provide a significant additional income for employees and pensioners, including for festive expenses.

Good news may come before Diwali

The government announced the formation of the 8th Pay Commission on January 16, 2025. According to sources, the Commission’s Terms of Reference (ToR) may be finalized before Diwali, and the official constitution of the Commission will be approved soon. The Commission is likely to consist of approximately six members, who will review and recommend salaries, allowances, and pensions for the coming year.

Typically, the Pay Commission submits its report in 15-18 months. The government plans to complete it in just 8 months. If everything goes as planned, the new salary and pension structure could be implemented from January 1, 2026.

Direct Impact on Employees and Pensioners

The increase in DA will provide immediate relief and additional funds for festive expenses. The recommendations of the 8th Pay Commission will also provide lasting financial benefits in the long term. Thus, this is a dual benefit for central employees and pensioners: first, the immediate benefit from the DA increase and second, the long-term benefits from the 8th Pay Commission’s recommendations.

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Dearness allowance for central government employees is expected to increase to 50 percent or more by January 2024. This increase will be done under the Seventh Pay Commission. The rate of DA is currently decided by the recommendation of the 7th Pay Commission. The last pay commission had also recommended that pay should be revised when DA and DR are 50 per cent or more of the basic pay to neutralize the effect of inflation.

In view of this, is the government planning to set up the 8th Pay Commission? Union Minister of State for Finance Pankaj Chaudhary has given information about this in response to a question in the Rajya Sabha on July 25, 2023. The Minister of State for Finance was answering a member’s question. The member had asked that if the rate of DA or DR is estimated to be 50 percent or more from January 2024, will the 8th Pay Commission be implemented?

What did the Minister of State for Finance answer?

Pankaj Chowdhary said that the Central Government employees and pensioners are paid Dearness Allowance (DA) and Dearness Relief (DR) to compensate for the fall in the real value of their salary and pension due to inflation. At present, DA 42 percent is being given to employees and pensioners. These rates are revised at six months. On the question of the 8th Pay Commission, the minister said that there is no plan nor is it being considered for the formation of the 8th Central Pay Commission for the Central Government employees.

Will be reviewed from time to time

Para 1.22 contained in the 7th Pay Commission Report, which recommended that the pay matrix of Central Government employees be reviewed from time to time on the basis of Ackroyd formula without waiting for a long period of 10 years Can Chaudhary said that the government has not considered approving the revision of pay and allowances on the basis of the Seventh Central Pay Commission.

The government has already denied

It is worth noting that there was a discussion about the formation of the Eighth Pay Commission earlier also, on which a reply was given by the Central Government. The government had refused to consider any proposal for the formation of the 8th Pay Commission.

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