8th Pay Commission: Government employees' salaries will see a bumper increase, but DA will be reduced to zero. Find out why.

8th Pay Commission: The Central Government has constituted the 8th Pay Commission. The Commission will submit its report to the government in 18 months. The government will then increase the salaries of government employees based on its recommendations. This is expected to result in a significant increase in employees' salaries. In the new salary structure, DA (Dearness Allowance) will be merged into the basic salary and will be restarted from zero. This will not result in any reduction in the net salary of employees, but will also increase allowances such as HR, TA, and pension. This change will further strengthen the pay structure of government employees.

8th Pay Commission Update: The Modi government at the Center has constituted the 8th Pay Commission to increase the salaries of government employees. Based on the recommendations of the 8th Pay Commission, government employees' salaries will see a bumper increase, but dearness allowance (DA) and dearness relief (DR) for pensioners will be reduced to zero. Let's understand in simple terms what this means and how it will affect employees' salaries.

What does DA Zeroing mean?

According to a government employee, "After the implementation of the 8th Pay Commission, employees' DA will be merged into their salaries. This means that the amount previously paid as DA will now be directly included in their salaries. When the government implements a new Pay Commission, the DA increase up to that time is added to the salary, and then the new DA starts from zero based on the inflation rate."

What is DA?

He explained, "DA simply means adding the new inflation to the old salary. The government increases DA every six months to protect its employees from the effects of inflation. As things become more expensive in the market, employees' purchasing power decreases. To compensate for this loss, the government increases DA to reduce the impact of inflation on employees' actual income."

DA is revised every six months.

The central government revises DA every six months. Data from the All India Consumer Price Index (AICPI) is used for this purpose. Based on this data, the amount of DA increase is determined. In January 2025, DA was 55%, which increased to 58% in July 2025, and is expected to reach 60% in January 2026.

What is DA Calculation?

Suppose a government employee's basic salary is ₹50,000 and the government is paying 50% DA on it, the total DA would be ₹50,000 × 50% = ₹25,000. This means that the employee's total salary would be ₹50,000 (basic) + ₹25,000 (DA) = ₹75,000. Now, if the DA is added to the salary after implementing the 8th Pay Commission recommendations, the basic salary will increase, and the DA will start again at 0%.

What is the Fitment Factor and its Role?

The fitment factor plays a crucial role in determining the salaries of government employees. It determines the difference between the old and new salaries. In the 7th Pay Commission, it was 2.57%, while in the 8th Pay Commission, it is expected to be between 1.92 and 2.05%. If a fitment factor of 2.57% is applied, then for example, if someone's basic salary is ₹40,000, the new salary will be calculated as ₹40,000 × 2.57 = ₹1,02,800. This will more than double the employee's salary.

DA will also become zero in the 9th Pay Commission.

This process is repeated with every new Pay Commission. When the new pay structure under the 8th Pay Commission is implemented, the Labor Bureau will release a new CPI base year (Consumer Price Index). Based on this, DA will again start at 0% and increase by 3% every six months. Consequently, DA will start at 0% in the first six months and continue to increase by 3%, 6%, 9%, 12%, and so on. Over the next 10 years, it will reach 50-60%, before being reduced to zero again under the 9th Pay Commission.

What will be the impact on employees?

The decision to reduce DA to zero will not result in any reduction in the net salary of employees. The only difference will be that the amount previously paid as DA will now become part of the basic salary. The advantage of this is that other allowances, such as HRA, TA, and pension, will also be determined based on the increased basic salary. This means that the overall salary structure of employees will become more robust. Once DA is included in salary, future increments and pension calculations will increase accordingly.

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