In a significant development ahead of the implementation of the 8th Pay Commission, the Central Government is reportedly considering merging the Dearness Allowance (DA) into the Basic Pay. If this proposal is approved, it could have a direct impact on the fitment factor, which plays a crucial role in determining the revised salaries of government employees.
Currently, the DA for central government employees stands at 55%, following a 2% hike in March 2025. If the government merges 50% of DA into basic pay, the minimum salary could increase from the present ₹18,000 to ₹27,000—even before the 8th Pay Commission officially takes effect.
The fitment factor is a multiplier used to calculate an employee’s revised salary. It determines how much the basic pay will increase under the new pay structure.
Under the 7th Pay Commission, implemented in 2016, the fitment factor was set at 2.57. This meant the existing basic pay was multiplied by 2.57 to arrive at the revised salary. For the 8th Pay Commission, employee unions have been pushing for a fitment factor between 2.57 and 2.86.
However, if a portion of the DA is merged into the basic salary, the government may choose to reduce the fitment factor, as part of the salary increase would already be factored in through the DA merger.
5th Pay Commission (1996–2006): When DA crossed the 50% mark, it was merged into the basic salary in 2004.
6th Pay Commission (2006–2016): This merger policy was discontinued.
7th Pay Commission: Recommended reinstating the DA merger once it crosses 50%, but the government did not implement it.
Now, with DA at 55%, the conditions for merger have again come into play. If implemented, this move would significantly reshape the salary structure before the 8th Pay Commission is formally introduced.
If the merger happens:
The minimum pay could jump to ₹27,000/month.
The fitment factor may be revised downward from expected levels.
There will be changes in allowances and other components linked to basic pay.
Future salary hikes may be calculated differently due to the adjusted base structure.
According to NDTV Profit, union representatives from the National Council – Joint Consultative Machinery (NC-JCM) had earlier insisted on a minimum fitment factor of 2.57. However, they may adopt a more flexible stance if the government proceeds with the DA merger, as it would already lead to substantial salary gains.
A senior union leader mentioned that while the demand for a higher fitment factor is valid, the merger of DA into basic pay would compensate to a large extent. This could result in a more balanced negotiation between employee bodies and the government.
Let’s assume the current basic pay is ₹18,000:
Without DA Merger (2.57 fitment factor):
₹18,000 × 2.57 = ₹46,260
With DA Merger (Basic Pay = ₹27,000 and Lower Fitment Factor):
Even with a reduced fitment factor of, say, 2.25:
₹27,000 × 2.25 = ₹60,750
Thus, even with a lower multiplier, your overall pay could increase significantly due to the higher base.
The merging of Dearness Allowance into Basic Pay could be a game-changing move by the government ahead of the 8th Pay Commission. While it may lead to a reduction in the fitment factor, the overall effect on employee salaries is expected to be positive. Government employees and pensioners are advised to stay updated and evaluate their options as the final structure evolves.
