Finance Ministry Confirms No Plans to Merge Dearness Allowance with Basic Pay for Central Government Employees

New Delhi:

The Finance Ministry has confirmed that there are currently no plans to merge the dearness allowance (DA) of central government employees with their basic pay, according to a statement made in Parliament on Monday.

Amid growing speculation regarding the 8th Central Pay Commission, the government has also clarified that no proposal for providing interim relief to central government employees is currently under consideration.

Minister of State for Finance, Pankaj Chaudhary, addressed this matter in a written response in the Lok Sabha, explicitly stating, "No proposal regarding the merger of the existing dearness allowance with the basic is under consideration with the government at present."

Chaudhary was responding to inquiries highlighting that central government employees and pensioners have been struggling with the highest inflation rates witnessed in three decades. These questions suggested that the revisions in dearness allowance (DA) and dearness relief (DR) are not adequately aligned with current retail inflation levels.

Employee unions have been actively advocating for the merger of 50 percent of the dearness allowance with basic pay, particularly following the government's announcement of the terms of reference for the 8th Central Pay Commission earlier in November.

In a related development, the government recently refuted a viral social media message claiming that retired government employees would cease receiving dearness allowance hikes and future pay commission benefits under the Finance Act 2025. The government declared this claim as fake, clarifying on the X platform that "Rule 37 of the CCS (Pension) Rules, 2021 has been amended to state that if an absorbed PSU employee is dismissed for misconduct, their retirement benefits will be forfeited."

The amendment in question specifically pertains to a limited group under the CCS (Pension) Rules, 2021, where Rule 37(29C) was modified after consultations with the Department of Pension and Pensioners' Welfare and the Ministry of Finance.