Just before the festive season, the central government has decided to increase employees' dearness allowance (DA) by 3 percent. Significantly, the DA will be effective from July 1, 2026. This decision will increase dearness allowance from 60 percent to 63 percent. This will benefit 48.54 lakh government employees and 68.71 lakh pensioners across the country. However, employees have also made a significant demand for dearness allowance for the 8th Pay Commission. This will lead to changes in salary calculations.

8th Pay Commission

The 8th Pay Commission was formed on November 3, 2025, under the chairmanship of Ranjana Desai. The commission's recommendations will be submitted in a few months, and then approved. The commission's work is progressing rapidly. The commission's members were currently on a visit to Mumbai. While this report was being submitted, the central government had already gifted employees increased allowances. The pay commission will be calculated based on the fitment factor. Various organizations have made significant demands regarding DA.

What are the demands of the employees regarding dearness allowance?

Along with the fitment factor, central employee unions have also proposed reforms regarding dearness allowance. Instead of increasing dearness allowance every six months, employee unions have demanded that it be increased every three months. Furthermore, employee unions have demanded that commissions exempt dearness allowance from income tax. They have also demanded that when dearness allowance exceeds 25%, it be added directly to the basic salary.

What will be the impact of the current DA hike?

A 3% increase in dearness allowance will increase the monthly salary of employees earning a basic salary of ₹18,000. Previously, these employees received ₹10,800 as DA. This will now increase to ₹11,340. Their salary will increase by ₹540 per month. Senior employees' basic salaries will increase by ₹1,500 to ₹3,000 per month. Arrears for the four months from July to October will be paid to employees in cash along with their upcoming salaries.

PC: TV9