Great news for government employees! Five major demands regarding DA have emerged; salaries could see a bumper hike..

In April, the central government raised the Dearness Allowance (DA) for central government employees and pensioners by 2%. This increased the DA to 60% of the basic salary, up from the previous 58%. Under the recommendations of the 7th Pay Commission, the DA is revised twice a year based on the All India Consumer Price Index (AICPI). The objective is to preserve the purchasing power of employees' income against the impact of rising inflation.

DA benefits extend to central government employees, Public Sector Undertaking (PSU) employees, defense personnel, bank employees, and retired pensioners. It is typically announced in March and October, with the benefits becoming effective from January and July, respectively. Private sector employees do not receive DA.

DA is part of an employee's total salary package (CTC) and is paid monthly along with the salary or pension. Its purpose is to compensate for the increased cost of living caused by inflation. Approximately 50 lakh central government employees and over 65 lakh pensioners—including defense personnel and retirees—benefit from DA hikes.

**5 Key Demands by Employee Organizations Regarding DA**
Central government employee organizations, unions, and pensioner representatives have put forward several significant demands concerning DA. These demands are expected to influence the recommendations of the 8th Pay Commission. The process for submitting memoranda to the 8th Pay Commission began on March 5 and concluded on June 15.

**1. Salary to be determined based on inflation**
The All India Defence Employees Federation (AIDEF) has demanded that employee salaries be aligned with inflation. The organization has also proposed setting the minimum basic salary at ₹69,000 per month.

2. Minimum 4% hike in DA and merger at the 50% mark

The Maharashtra Old Pension Organization has demanded a minimum hike of 4% in Dearness Allowance (DA) and a merger of DA with the basic salary once it reaches the 50% level. Additionally, there is a demand to set the minimum monthly salary at ₹65,000.

3. DA should be fully linked to inflation

The National Council-Joint Consultative Machinery (NC-JCM) maintains that DA calculation should be based entirely on an inflation-linked model. The organization has also demanded an increase in the minimum basic salary from the current ₹18,000 to ₹69,000.

4. Government should decide soon on DA merger

Several employee organizations have urged the Central Government to make an official announcement regarding the merger of DA with the basic salary. The 7th Pay Commission had stated that if DA exceeds 50%, its merger with basic pay could be considered. Currently, DA has reached 60%, yet the government has not taken any official decision on the matter.

5. DA calculation method should be revised

In its second memorandum submitted to the 8th Pay Commission, AIDEF has demanded a change in the existing formula for calculating DA. The organization argues that the current system places excessive weight on expenses where prices remain relatively stable, whereas low-income employees spend a significant portion of their earnings on essentials like food, education, healthcare, house rent, medicines, and other necessities. Therefore, these essential expenses should be given greater importance in the DA calculation.

Why is the DA hike a major demand?
The Railway Senior Citizens Welfare Society (RSCWS) states that the current DA only partially compensates for the financial impact of inflation. The gap between periodic salary revisions and continuously rising inflation significantly affects employees' purchasing power.

The organization also points out that the current salary structure places greater emphasis on allowances and DA rather than on the basic salary itself. Since most pension and retirement benefits are linked to basic salary, a low basic pay impacts the long-term financial security of retired employees.

Although the central government has not made any official announcement regarding the merger of Dearness Allowance (DA) with basic salary by June 2026, the issue is considered significant because Provident Fund (PF), pension, various allowances, gratuity, and other financial benefits are determined based on basic salary. Consequently, if DA is merged or basic salary is increased, there could be a rise in the employees' total income and other benefits.

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