The Finance Ministry has made it clear that there is no plan to merge Dearness Allowance (DA) with basic pay for central government employees. This statement was given in Parliament on December 1, 2025, by Minister of State for Finance Pankaj Chaudhary.
What Was Said:
Many employee unions had asked the government to merge DA with basic pay, especially since DA has crossed 50 percent. Such a merger would increase allowances and retirement benefits because most perks are calculated on basic salary. However, the Finance Ministry said that no such proposal is under consideration.
What Is Dearness Allowance:
Dearness Allowance is given to government employees to help them deal with rising prices. Pensioners also get a similar benefit called Dearness Relief (DR). Both DA and DR are revised every six months based on the All India Consumer Price Index, which measures inflation. This way, employees and pensioners are protected from the impact of price increases.
Pay Commission Context:
The government has already announced the 8th Central Pay Commission, which will look at salaries and benefits for more than 5 million employees and 6.5 million pensioners. While this commission will decide future pay structures, the Finance Ministry confirmed that merging DA with basic pay is not part of its plan.
Impact on Employees:
For employees, this means that their basic pay will remain the same, and DA will continue to be given separately. While some may feel disappointed, the government explained that DA is meant only to offset inflation, not to permanently change salary structures.
Why It Is Important:
This clarification is important because it ends speculation about a sudden salary increase through DA merger. Employee unions had hoped for higher benefits, but the government’s decision shows that it prefers to keep DA as a separate allowance. The focus remains on regular inflation-linked adjustments rather than big changes in pay scales.
The Finance Ministry’s statement makes it clear that DA will continue to be revised every six months, but it will not be merged with basic pay. The upcoming 8th Pay Commission will decide future salaries, but for now, employees and pensioners will keep receiving DA and DR as separate allowances.
