DA Merger 2025: The announcement recently made by the Central Government has raised the Dearness Allowance (DA) of its employees by 2% from 53% to 55%. This is an upturn every six months, so that salaries and other connected allowances, House Rent Allowances (HRA), and Travel Allowances, a pressing question in every employee’s mind is: Whether this DA will be merged with the basic salary?
Well, let’s find the official stance of the government and what it means for the central employees.
Latest DA Hike- Important Changes for Employees
In terms of the newly revised DA, it now stands at 55%, thus the net revenue entitlement for central government workers is improved directly. The increase in the cost of living will be attested to as this DA rises, since it is revised based on the All India Consumer Price Index (AICPI-IW). The forthcoming DA revision would take place in November 2025 but would be effective from July 2025. This was to be the last DA hike under the 7th Pay commission, as the 8th Pay commission would be effective from January 2026.
Will the New DA of 55% Merge with Basic Salary?
The unions of such employees have vocally been supporting the merger of DA with the basic pay, especially as it has crossed the fifty percent mark. For example, according to the historical practice of the 5th Pay Commission, the following conditions had to be satisfied, contract completion: DA would merge with basic salary on attaining a level of more than 50%. However, this procedure was not carried out under the 6th and 7th Pay Commissions, leaving employees stressed about uncertain future benefits.
The government has made its position clear:
- There are no current plans to merge DA with basic salary.
- Minister of State for Finance, Pankaj Choudhary, recently stated in the Rajya Sabha that the demand for DA merger is not under consideration.
- Any major changes in salary structure will now depend on the recommendations of the 8th Pay Commission.
What Will the 8th Pay Commission Bring for Employees?
In hopes of the revised salary structure upon implementation of the 8th Pay Commission in 2026, employees wish for some major changes:
- A formula for the calculation of dearness allowance that will consider inflation better.
- There might be changes in house rent allowance, travelling allowance, and all other allowances.
- An open reassessment of the DA merger policy, depending upon economic criteria.
Conclusion
At the moment, DA will continue to be paid as a separate component of the salary for central government employees. Although the 55% DA increase gives some relief to employees presently, a merger with basic pay is a distant dream. Employees now await further recommendations of the 8th Pay Commission for any changes in the structure of their compensation.