DA Merger: The 8th pay commission is bound to bring high hopes to a million central government employees and other pensioners. If the government goes ahead with merging the Dearness Allowance into basic salary and introducing an appropriate fitment factor, the pay hikes that employees could enjoy will increase massively. Below are all the vital details regarding the latest development related to this topic.
8th Pay Commission Latest Update
The Modi government, in January 2024, announced that the Eighth Pay Commission will be set up after the Seventh Pay Commission exercises its duties until the end of December 2025. Such a declaration has indeed brought curiosity among central employees and pensioners alike who are eagerly looking forward to knowing how much their salaries will be revised under the new commission.
Even before the disclosure of the chairman and members of the 8th Pay Commission by the government, discussions on key issues, fitment factor, and DA merger with basic pay have commenced.
Understanding The Fitment Factor
The fitment factor is a mathematical multiplier that revises an individual’s basic pay before salary reassessment to arrive at a new amount. This is done based on Dearness Allowance (DA) and economic conditions prevailing across the nation, so that salary increases are fair and uniform for all employees.
As a rule, each pay commission has worked in the manner, first merged DA into the basic, and afterward determined the fitment factor in assessing the new pay structure.
How the Fitment Factor Works – A Practical Example
When the 7th Pay Commission was implemented in 2016, employees were receiving 125% DA. The commission recommended a fitment factor of 2.57. Here’s how it worked:
- Basic Salary (2016): ₹10,000
- DA (125%): ₹12,500
- Total Salary Before Revision: ₹22,500
- Revised Salary After Fitment (2.57x): ₹25,700
Thus, the fitment factor was calculated as:
₹25,700 (New Basic) / ₹10,000 (Old Basic) = 2.57
This trend has been consistent across previous pay commissions:
- 5th Pay Commission (1996): DA was 74%, fitment factor 1.86
- 6th Pay Commission (2006): DA was 115%, fitment factor 1.86x (including grade pay)
- 7th Pay Commission (2016): DA was 125%, fitment factor 2.57
Will the 8th Pay Commission Follow the Same Formula?
Given past trends, it is highly likely that the Eighth Pay Commission will also merge DA with basic pay before applying the fitment factor. This could lead to a substantial salary hike for employees.
Currently, discussions suggest that due to stable inflation rates (July-December 2025), there may be a marginal increase in DA. Employee unions are demanding a fitment factor of 3.0 or higher to ensure a real salary increase that keeps up with rising living costs.