8th pay commission: DA merger, salary hike, fitment factor, inflation adjustment — Top 5 demands from employee groups
The 8th central pay commission (CPC) is in its consultation stage, gathering inputs from central government employees and pensioner groups, unions and stakeholders before it makes its final recommendations in May next year.
It is expected to examine and recommend changes that are desirable and feasible in the emoluments, including pay (usually includes salary structure, pay matrix, fitment factor), allowances (usually include DA, DR, HRA), other facilities / benefits, in cash or kind (includes increment, promotions, etc.).
The decisions are set to benefit more than 1 crore people, including around 50 lakh central government employees and about 65 lakh pensioners, including personnel and retirees with the defence and railway ministries.
The commission has scheduled an official state visit to Mumbai on 22-23 October to hold meetings with employee unions, representatives, groups, pensioner associations, federations, and other stakeholders.
- Demand for DA merger
Multiple employee unions and representative groups have demanded that the Centre make an official announcement on DA merger. This is because the 7th CPC stipulated that DA may be merged with basic salary if it exceeds 50% and as of the last update, the component now comprises 60% of basic pay.
Notably, the government has not officially announced a DA merger (which would expand basic pay) as of June 2026, the issue has gained traction because basic salary determines other components of compensation i.e. provident fund contribution, pension, allowances, gratuity, and more. Thus, higher DA and by association basic pay means increase in overall salary and linked allowances.
- Demands related to minimum basic pay
The big employee groups including the National Council — Joint Consultative Machinery (NC-JCM), the Maharashtra Old Pension Organisation and the All India Defence Employees Federation (AIDEF) have demanded hike in the minimum basic pay for central government employees. NC-JCM: ₹69,000, Maharashtra Old Pension Organisation: ₹65,000, AIDEF: ₹69,000.
Meanwhile, the Indian Railways Technical Supervisors Association (IRTSA) has demanded that the minimum pay be revised to ₹52,600 based on modern economic factors, and that different fixation factors be adopted. While the Railways Senior Citizens Welfare Society (RSCWS) has called for minimum pay to be calculated based on the price index as of 01.01.2026.
- Demand for DA hike
The three have also made following demands for Dearness Allowance — NC-JCM: Inflation-linked wage model, Maharashtra Old Pension Organisation: Minimum 4% DA hike + DA merger at 50%, AIDEF: Inflation-adjusted compensation demands.
- Demand for fitment factor hike
Further, IRTSA said that higher indexing of the fitment factor should be followed for posts at level 6 in the Ministry of Railways for safety category posts. It has suggested the fitment factors of 2.92, 3.50, and 3.80.
- Demand for change in DA calculation formula
The AIDEF in a second memorandum submitted to the 8th CPC also sought a change in how DA is calculated. It argued that the current formula assigns higher weightage to relatively stable expenditure categories, while employees, especially those on lower pay grades, spend a larger percentage of their salary on food, education, healthcare, house rent, medicines and other essentials.
The terms of reference (ToR) for the 8th CPC outlines that recommendations be announced within 18 months of panel constitution (on 3 November 2025). Thus, the absolute deadline to submit the report is May 2027.
Once the pay commission's recommendations are made, the rollout could take another two to three years to complete. This means that hikes announced in 2027 may only be fully implemented by 2029 or 2030.
Jocelyn Fernandes is a journalist and editor with nearly 13 years of experience covering the business, corporate, economy and markets beats in news.<br> As chief content producer for around three years at Livemint (Hindustan Times), Jocelyn publishes breaking stories, explainers, features and live blogs on a range of business and economy topics, including the Budget, corporate developments, stock markets, income tax, money and personal finance, cryptocurrency, government policy, impact of US tariffs, international developments and more.<br> Jocelyn's writing philosophy is focused on delivering news in an accurate and accessible format for readers. She thus focuses her news coverage on explainers and FAQs in order to breakdown business, corporate, economic, and policy topics that are of importance to everyday readers.<br> She holds a Bachelors in Mass Media (BMM) and Post Graduate Diploma (PGD) in Journalism and Communication and has previously written for online business and markets news site Moneycontrol (Network18), Business-to-business (B2B) trade publications — the industry magazines Power Today and Solar Today (ASAPP Media), and the national news agency United News of India (UNI).<br> Outside of work, Jocelyn keeps up-to-date with local and international news, enjoys reading fiction books, novels and short stories, and enjoys movies, travelling and art. <br> She can be found on X and LinkedIn, and reached by email: <a href="jocelyn.fernandes@htdigital.in">jocelyn.fernandes@htdigital.in</a> <br> X/ Twitter handle: <a href="https://x.com/scribeJocelyn">@scribeJocelyn</a> <br> LinkedIn: <a href="https://in.linkedin.com/in/jocelyn-fernandes-journalist">LinkedIn</a>
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