8th Pay Commission: Will DA Continue to Increase Until Implementation? Here’s How Salaries May Rise

The discussion around the 8th Pay Commission is intensifying among central government employees. With the Union Cabinet recently approving its Terms of Reference (ToR), expectations about salary hikes and allowances have picked up pace. But a major question remains—what will happen to Dearness Allowance (DA) until the new pay commission becomes effective?

Amid these concerns, Minister of State for Finance Pankaj Chaudhary clarified in Parliament that the government will decide the implementation date only after the commission submits its recommendations. He also confirmed that once the report is accepted, adequate funds will be arranged to roll out the revised pay structure.

When Was the ToR Announced?

The 8th Pay Commission has already been constituted.
Prime Minister Narendra Modi approved the Terms of Reference on 28 October, followed by an official notification issued by the Finance Ministry on 3 November.

The government also announced the final DA hike of the year in October. Since then, the most common doubt among employees is: Will DA continue to increase till the 8th Pay Commission comes into effect?

DA Will Continue—No Change in the Existing System

The straightforward answer is yes — DA will keep increasing as usual.

• DA will continue to be calculated on the existing basic pay.

• The revision cycle of January and July will also remain unchanged.

• The calculation formula will stay the same.

Once the 8th Pay Commission is implemented, the then-existing DA will be merged into the new basic pay, restructuring the entire salary matrix. This process resets the pay bands and allowances in line with the revised pay scale.

Why DA Matters More Today

Over the years, the share of basic pay in government salaries has gradually decreased.
Currently, basic pay accounts for around 50% of total salary, whereas earlier it used to be nearly 65%.

This shift makes DA one of the most crucial components for protecting employees’ income from inflation. The 3% DA hike announced on 1 October, just before Diwali, brought significant relief to millions of families battling rising costs.

What Changes Are Expected from the 8th Pay Commission?

The 7th Pay Commission introduced the pay matrix system, replacing the earlier grade pay model. The upcoming 8th Pay Commission is expected to refine and modernize this structure.

Key expectations include:

• Updating salary slabs to reflect current economic conditions

• Revising allowances in line with rising expenses

• Bringing uniformity in pay progression and matrix levels

If implemented from 1 January 2026, the commission will benefit:

• Around 50 lakh central government employees

• About 69 lakh pensioners

• A combined total of nearly 1.19 crore beneficiaries

DA Will Remain the Main Support Until Implementation

Until the 8th Pay Commission becomes operational, DA hikes will continue to provide inflation protection. Each increase ensures that employees’ purchasing power doesn’t erode due to rising prices.

The government’s objective during this transition period is to help employees manage inflation effectively until the revised pay structure comes into force.

Conclusion

The wait for the 8th Pay Commission may take some more time, but employees need not worry about DA. The allowance will continue to rise regularly, following the existing formula. Once the new pay commission is implemented, the accumulated DA will merge into the revised basic pay, resulting in a substantial salary upgrade.

For now, DA remains the most reliable cushion against inflation for central government employees.