Outlook Business Desk
The Central government has given the 8th Central Pay Commission (CPC) an 18-month timeline to review salary structure, allowances and service conditions for over 4.5 million employees and around 6 million pensioners across India.
Employee associations are pressing for interim relief before the final recommendations. They argue that rising inflation and expenses make early financial support necessary while waiting for the commission’s final report.
Unions are continuing their demand to merge Dearness Allowance (DA) with basic pay. They believe this move can help reduce future arrears pressure and also play a key role in determining the fitment factor for salary revision.
The 8th Central Pay Commission officially began its work from January 1, 2026. It has already been several months since the government approved its terms of reference for the exercise.
Dr Manjeet Singh Patel of the All India NPS Employees Federation suggested a hypothetical fitment factor of 2.0. He said a 1.5 times revision could be applied first by merging DA with basic pay.
Under the suggested structure, the remaining 0.5 adjustment could be paid later as arrears after the commission’s final recommendations, according to the proposal shared by employee representatives.
Meanwhile, Minister of State in the Finance Ministry Pankaj Chaudhary informed Parliament on December 1, 2025, that the government is not considering any proposal to merge Dearness Allowance with basic pay at present.
On the other hand, labour and employment expert Rohitaashv Sinha from King Stubb and Kasiva said the government is expected to take a cautious approach before approving any interim relief measures.
Experts note that arrears burden may increase once revised pay scales are implemented from January 1, 2026. They also point to the 7th CPC, which added ₹1.02 lakh crore in cost and ₹12,133 crore in arrears across pay and allowances.